Value Added: The fine art of building franchises
Monday, January 24, 2011
I was halfway through a phone interview with entrepreneur Mary Rogers when she said something refreshing.
"I'm not rich, but I'm comfortable," said the co-founder of Abrakadoodle, a Reston-based art education franchiser that grossed more than $1 million last year. "I love what I do. When you look at the average small-business person, they make an average amount of income and they take a huge amount of risk."
I forgot that many entrepreneurs simply want to enjoy their work, have the freedom to be their own boss and to make a decent living doing it. It's what business school professors call NLOs - Nice Living for the Owner.
"Money has never been a big motivator for me," she said from her home in Williamsburg, Va., where she lives with her husband, a retired Wall Street Journal reporter.
Rogers, 60, is a special education teacher by training who has a head for business. In 1997, she sold one franchising company called Computertots, which taught kids to work with computers. She is contractually prohibited from disclosing the sale price, but it was enough to help pay for a Cape Cod fixer-upper.
She and Rosemarie Hartnett, 55, who founded Abrakadoodle with her, earn less than $100,000 apiece on their business, which stretches from Fairfax to Singapore. But they love teaching art to children. They enjoy good benefits, travel frequently and expect revenues to increase by 50 percent this year.
Abrakadoodle sells franchises that offer art classes, camps, parties and special events for children ages 20 months to 12.
It has about 66 franchisees (they said they have room for 250 worldwide), most of them in the United States, that pay Abrakadoodle a one-time startup fee between $22,400 and $35,900 and 9 percent of gross revenues. The royalties earn Abrakadoodle more than $400,000. The rest of the revenue comes from franchise sales, both in the United States and Asia.
And the company is on a tear in Asia. It initially hired a company to help it open new markets. Now, it has moved the work in house. Abrakadoodle is expanding existing programs in Japan, China and Indonesia, and plans new franchises in Taiwan, South Korea, Hong Kong and the United Arab Emirates.
Rogers and Hartnett both share a love of art. Hartnett, a Great Falls resident, has an art history background; Rogers took a million art classes growing up, but studied education in college and graduate school at George Washington University.
They had worked together on Rogers' Computertots startup and kept in touch after Rogers sold it. In 2002, when schools started cutting back on art class budgets following the bursting of the dot-com bubble, they got an idea for a national art program for kids.
They dropped fliers at local preschools with information about two six-week sessions of art classes they had planned at the McLean Community Center. The cost was $70 per child. They advertised for art teachers in The Washington Post and in community papers.