Jersey Mike’s Subs franchise owner Steve Zeigler (right) owns five stores with his son, Adam.[/caption]
After spending 23 years in the corporate world, Steve Zeigler said he was ready to do something else. He said he wanted to get into a business with his son, Adam, and find something that would allow the two of them to be involved in the community.
When Zeigler researched businesses, he said he found that Jersey Mike’s Subs’ company mission encouraged store owners to stay active in the community.
“I grew up in a town where my parents were involved in the community,” he said. “I felt that’s what was lacking in my life, and I wanted to be able to include that.”
Zeigler now owns five Jersey Mike’s stores, three of which are in Frisco. Consumers walking into one of Zeigler’s stores may not realize that although the brand is nationally recognized, the store itself is locally owned and operated.
These stores are known as franchises. A franchise is a business model in which the franchisee—the one who owns the business—gets the licensing rights from a franchisor—the parent company of the franchise—to open up a store using the franchisor’s name and business model.
All franchises are independently owned. Any chain stores still owned by the corporation are not franchises, said John Reynolds, the International Franchise Association’s Educational Foundation president.
The IFA is an advocacy and support organization for franchises. According to the IFA’s website, the United States has 780,000 franchises that produce $890 billion in annual economic output for the U.S. economy.
Like any other local business, franchise owners still pay sales taxes to the governing city, Zeigler said.
Franchise owners get to keep the profit made from their stores and pay an initial fee and a percentage of royalties back to the parent corporation, Zeigler said. In corporate-owned stores, most of the profit goes back to the corporation, Reynolds said.
“In the franchise model, the ownership and the equity live in that community,” he said.
Franchise licensing agreements allow franchisees to use the company’s brand, including in signage and decor. Franchises are often easier to own because the franchisor will provide everything for the store owner, said Frisco resident Tony Alcini, who has owned both an Auntie Anne’s Pretzels franchise and his own business.
“I didn’t know much about pretzels, other than eating them in the mall,” he said, explaining that Auntie Anne’s provided the training and the store locations. “It’s a safer way to get into a business.”
Many franchisors will provide training for store owners and employees. Franchisors will provide this training to ensure a consistent quality and execution of the brand, known as the brand promise, Reynolds said.
“Behind that brand name is a whole system that is set up to maintain the quality and ensure the consumer that when you shop in this store or in this restaurant, it’s going to be consistent,” he said.
This brand promise is important, Zeigler said, because the experience a consumer has at one store could affect his or her perception of other surrounding stores in the same franchise.
“If you get a bad franchisee near you, that’s a problem for everybody,” he said. “We all have to be the same.”
Alcini said consumers know that the quality of the product is supposed to stay the same from one franchise to the next. Consumers also know that franchises are likely to stay in business because they are backed by a national brand.
“As a consumer you have a little more faith that the operation is going to be around, and you know what to expect,” he said.
The key to being a successful franchise owner is to be passionate about the brand, Zeigler said.
“You have to be passionate about whatever you’re going into,” he said. “I would have never guessed that I could become as passionate about this business as I have become because I’ve never been in the food business, but I do love the brand. I love the sub, and I love what we stand for.”
