Greater Lansing Offers Welcoming Business Climate for Franchises

The consulting service reports that nearly 3,100 franchise concepts are available today. Some are new, some are regional and some are household names. Initial investments vary from a few thousand to several million, with an average buy-in cost of $200,000. Franchisees also pay regular royalty fees to the franchisor for the use of products, a service or delivery format, and ongoing support in the form of training, marketing and overall expertise.

In the past few years, franchises have experienced modest economic growth, making small but steady gains in output and employment. The International Franchise Association Educational Foundation projects that the number of franchise establishments will increase by 1.7 percent in 2014, slightly ahead of the 2013 pace, and that employment growth will match the 2.3 percent of 2013. While humble, the gains of the larger franchise sector are projected to amount to about 3.5 percent of the U.S. GDP at $493 billion, and to support about 8.5 million jobs.

Greater Lansing is likewise experiencing an uptick in franchising, with several new and established franchises providing opportunities, particularly in the largest franchise business line: quick
service restaurants.

Coming to the Neighborhood

Everyone knows their name. With more than 60 years in the business, Dunkin’ Donuts proclaims to be America’s favorite all-day, everyday stop for coffee and baked goods.

In Michigan, Massachusetts-based Dunkin’ Donuts operates 60 restaurants, and plans to open 40 more across the state in the next several years. Franchise candidates are being recruited in several key markets, including Flint, Traverse City and Lansing.

Steve Rafferty, senior director of franchising for Dunkin’ Brands, says Dunkin’ Donuts is strong in core markets like Boston and Chicago, and is looking to expand beyond the company’s 8,000-plus stores.

“We’re in a rapid growth phase outside our core areas,” says Rafferty. “We’re excited to continue this expansion and to make our coffee and donuts available to people in Lansing.”

Three Dunkin’ Donuts operate in Lansing, including those on Lansing’s eastern and western edges and one in Okemos. Rafferty says Dunkin’ Donuts is seeking an individual franchisee to operate five new stores in Greater Lansing. The franchise offers flexible concepts for any real estate format, including freestanding restaurants, end caps, in-line sites, gas and convenience, travel plazas, universities and retail environments. And each store, he says, creates an average of 25 to 30 jobs.

Ultimately, customers will drive the number of stores in the capital region, but Rafferty believes Lansing needs reasonably priced foods delivered through a convenient and comfortable environment.

“While we’re known for great coffee and donuts, we have a broader menu that people might not know about — like breakfast and sandwiches for later in the day,” says Rafferty. “We’ve been warmly welcomed by our guests in Michigan. We’re very happy about that.”

Community Presence

While Dunkin’ Donuts anticipates a relatively rapid expansion in Lansing, other franchises have nurtured steady growth over the years.

Stanton Associates started its first Wendy’s franchise in Lansing on South Cedar Street in 1975. In that 40 years, the franchisee has added about two to three Wendy’s a year. Today, the Jackson-based company boasts 67 locations in 21 counties across Central Michigan, with 19 restaurants in Jackson, Ingham, Eaton and Clinton counties.

Randy Israel, a partner in Stanton Associates, says that an individual Wendy’s franchise creates 25 to 30 jobs, and has a ripple effect on the surrounding community. Community programs are central to the Wendy’s corporate philosophy, with each store in Stanton’s group raising and contributing dollars to the local greater good.

In addition to Wendy’s, Stanton Associates recently ventured into owning and operating Biggby stores, and is working to open the sixth location of the specialty coffee chain.

“We’re always looking to expand or to upgrade and keep our facilities in great shape,” says Israel. “The big thing is we’re in this community. We think of it as family, so it’s great when you’re able to see someone grow and develop as an employee and to watch their families grow, too.”

While new to franchising, business owner Sam Shango expresses a similar sentiment.

Shango bought his first Firehouse Subs in 2013, hired 20 people, and opened the doors in downtown Lansing in January 2014. Eventually, Shango hopes to own four more shops in the “fast casual” chain, with a second location opening in the next six months.

Shango came to franchising after experiencing the challenges of owning and operating an independent line of party and convenience stores.

“Everybody should try franchising,” says Shango. “While I love being an independent guy in my other businesses, my franchise gives me a lot of support.”

Like Wendy’s, Firehouse Subs encourages giving back to the community, with a percentage of sub sales going to support local first responders and public safety organizations.

“How many businesses can say they have a business model that allows them to give back?” asks Shango. “Being part of that gives you a warm feeling.”

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