With a growing number of health-conscious diners looking for nutritional dishes on fast-food restaurant menus, Chris Spears and Gary Williams are making sure these selective eaters have somewhere to go. In 2004, the business partners opened the first of many planned Nemos Seafood restaurants, a take-out chain that offers fresh, home-style seafood entrÃ©es — a healthy alternative to deep-fried, high-fat fast food.
How do they know they’ve hooked a winning idea? Before a customer ever set foot in their first store in Linden, New Jersey, the partners had already sold three franchises. Today, the number of existing and contracted Nemos Seafood franchises has reached 70, and locations include Maryland, Georgia, New York, and Pennsylvania.
The Nemos Seafood owners are discovering that franchising their business has tremendous advantages, from expanding with minimal capital investment — since franchisees provide the initial investment — to competing more effectively against much larger competitors. “They saw the vision,” says Williams, 34, Nemos Seafood’s chief financial officer, referring to franchisees who were attracted to the company’s health-conscious concept in take-out food. “We had our franchise package together, we explained it, and they wanted to be a part of it.”
Spears and Williams, both former Blimpie franchise owners, invested $250,000 from personal savings, proceeds from the sale of their Blimpie properties, and a home equity loan to turn an old Chinese restaurant into the first Nemos Seafood. Their investment has paid off. Last year, Nemos Seafood’s corporate store brought in $650,000 in revenues. For 2006, Williams is confident they’ll reach the $900,000 mark. Their franchise stores can expect an average $600,000 in annual revenues.
Interested in becoming a Nemos Seafood franchise owner? Total startup costs, including the franchise fee, range from $167,000 to $249,000, depending on the size of the location. A 20% deposit (about $33,000) is required once paperwork is complete. Visit www.nemos-seafood.com for additional information.
Just about any type of business can be franchised. But you have to determine if your business concept and operation are ready for franchising before you begin the process. Nemos Seafood owners Spears and Williams offer this advice:
Have funds available. As Spears and Williams can attest, starting your own franchise could cost as much as $250,000. Be prepared to spend money on attorneys, consultants, certified public accountants, etc.
Seek help from experts. Meet with a business consultant and a lawyer who specializes in franchises to help you evaluate your concept. Talk to startup and veteran franchisers about their businesses. The International Franchise Association (www.franchise.org) can help you find consultant companies such as The iFranchise Group (www. ifranchise.net) or Michael H. Seid & Associates L.L.C. (www.msaworldwide.com).
Devise a franchise business plan. Develop a road map for your business with achievable goals. The plan should include a franchise overview and answer questions about your products and services, your target market, your proposed management staff, and financial projections.
Develop a franchise agreement. This includes the company’s operating manual, promotional materials, checklists, and guidelines as well as the franchise agreement, which details the legal rights and obligations of the franchise company and the franchisee.