Last year alone, The Bahamas welcomed the entrance of several new franchise operations including Papa Johns, Quiznos and more recently the returned Burger King.
With the close proximity of The Bahamas to the United States and the frequency with which Bahamians travel to Florida as well as other states, the choice for franchise arrangements by Bahamian business owners are most often the more popular American franchises that Bahamians would have experienced in their travels.
The Bahamas however is not alone in embracing the booming international franchise expansion by U.S. companies. According to the International Franchise Association (IFA), in 1995 more than 400 U.S. franchise systems could be found operating internationally and by 2000 this figure had increased by about 100.
According to IFA, international franchising has been successful because consumers around the world recognize famous brands as symbols of quality, consistency, service, and value.
According to Don Spina, general manager of Q.S. Restaurants, operators of Quiznos, the most attractive feature of a franchise operation is the ease with which it can be set up. “Most franchises they have everything pretty much laid out from construction through opening with timetables and everything. Actually opening up a franchise is easier than opening up your own place because with a franchise everything comes laid out.”
He continued that while opening up a business on one’s own allows a lot more personal flexibility and freedom from franchise fees and royalties, choosing the franchise route also has its benefits. With a franchise, the business model has been proven and thus it is easier to obtain financing.
“For this Quiznos I got a restaurant in a box or a restaurant on a container. I ordered everything through them so I didn’t have to worry about looking for ice machine or looking for a fryer. When you buy the franchise and you want to open the first restaurant, they say this is what you need to open that restaurant,” Mr. Spina said.
While the popular choice for franchise operations for most Bahamian business owners has traditionally been food-based businesses, some people are now looking beyond the food industry and establishing service-oriented franchises.
For Gershan Major, chief executive officer and managing partner of Caleb Enterprises, operators of Mail Boxes Etc (MBE), he saw the franchising trend eventually moving from food-based to a more service based system. “We determined that the trend is moving more from food-based franchise system to service-based franchise system,” he said.
He also touted the ease of set-up and a proven operating model as the major advantages for choosing to become a franchisee. “You’re entering a system that has been proven for so many years and that has replicated itself so many times,” he said. Mr. Major continued that: “One coming into a franchise system is going to look at their investment, the risk and reward factor and say, okay if I invest in this particular franchise system, what does this provide for me in ensuring that I can see a reasonable return on that investment over a 10, 15, 20 year span… The risk and reward factor of a franchise versus a normal start-up is far less.”
According to Mr. Major, the possibilities for return is what has made franchises an attractive choice for people with the entrepreneurial spirit.
As some Bahamians are looking outside for franchising opportunities, others such as Craig Walkine, president, Price Busters Company Ltd, are creating their own franchising opportunities from within The Bahamas. Price Busters, which has been around for over 12 years and grown to 11 stores on New Providence, now has two franchise locations in Abaco and Grand Bahama.
For Mr. Walkine, the decision to begin franchising was a logical one. The company was interested in expanding its operation to other islands but realized that the best people to operate a business on a particular island were residents of that island. “We will never know these areas, particularly the family islands as well as someone who lives there, the local taste and the local preferences and if we try to operate from Nassau, that’s very difficult to do.” he said.
Another reason for deciding to franchise for Mr. Walkine was it decreased the need for him to personally attend to the operations. “We don’t necessarily want to be involved in the day-to-day operation of those satellite stores. That means jumping on a plane every week back and forth…(and) we all know when someone owns something they perform a lot better than when they are working for someone,” he said.
Mr. Walkine explained that Price Busters’ franchise operation followed a similar format as traditional franchises with the exception that they do not receive a percentage of sales. “We set a fee, a monthly fee which they pay us and we pretty much act as the parent for those franchises. We are looking to that with several of the other islands as well.
“We have an operations manual that tells the franchisee exactly how we operate, all the qualities, the pricing, the concept, the layout, the merchandising and all of that,” he said. “It helped that we had something documented already and then of course we have a legal document as well that kinds of ties us in and commits the franchisee and us actually to certain things. So we didn’t really have much of a problem.”
Mr. Walkine continued that he has experienced very little difficulty in setting up the franchises but credits that to the fact that he personally knows the franchisees. “In the case of both of the stores I knew the people and I think most of the problems franchisors have is with the franchisees. I knew the people for years and trusted them, so that was pretty easy.”
Martella Matthews, The Nassau Guardian
