Businesses For Sale

› Joe’s Personal History with Master Franchising

You may be wondering why we offer a choice between traditional Established Business Ownership and Master / Regional Franchise Development / Ownership. Here’s why: We strongly believe in both formats, have over twenty-five years of experience with both forms of Business Ownership and understand the pros and cons of each. The combination of these two ownership models drives the US economy dominating financial, production and employment statistics.

The former offers the opportunity to acquire an established business with immediate cash flow that has been defined, measured, and valued. Customers have been retained, employees hired and trained, and management and marketing systems are in place. The company’s success has created a favorable reputation in the community for the business and its owners. In most cases, the acquisition of an established business is also a social introduction to the community for the new owners. The businesses we accept as clients are profitable, unique in some way, and have sufficient cash flow to pay the monthly debt service to the third party lender for the monthly acquisition costs and provide the new owner a reasonable ‘living wage’. Comparatively speaking, this form of business ownership is considered a safer investment assuming a National Lender and other Professionals are involved in the due diligence.

The latter offers less initial security as the regional business income has not been established nor is it known for its specific market area. Often Regional or Master Franchises offer the opportunity to be one of the ‘first in’ for a new concept or a new design or ‘take’ on an established concept. For someone who wants excitement, loves new ideas, can handle the risk of having no established, initial cash flow, likes rapid growth with all its challenges and benefits, the opportunity to lead a group of people with a common goal, and enjoys mentoring-- then a Master Franchise may be the way to go. Just writing this has made my heart beat faster as developing a Regional Area as a Master Franchisee offers many emotional rewards plus a significant financial up side in a relatively short period in most cases (5-10 years) along with enough risk to keep you wide awake on some nights. It’s exciting but you need a strong heart, a stable ego and a true financial understanding of how businesses really work.

Century 21 Real Estate Company is a very successful example of the above. The company is the great grandfather of today’s master franchising models (improved) in the USA and in International franchise expansion.

The company began in Southern California in 1972 as a co-operative real estate company owned by Art Bartlett and a few minor investors. Written accounts say they had $6,000.00 of initial seed money and no one was thinking of franchising. They were focused on making a living as Realtors and had no ambition beyond the Southern California market. They simply wanted to pool their advertising dollars with other small real estate offices to create affordable full-page LA Times newspaper ads in order to develop the print ad synergy to compete with several multi-office larger competitors that dominated the Sunday classifieds.

Franchising was not common and most folks had no idea what a Master Franchise was. There were no enforced franchise laws nor franchise uniformity from state to state. By accident, Bartlett stumbled across the concept of Master Franchising when Realtor/Developer George Kettle of Virginia offered to take this ‘new idea’ to the East Coast while attending a Realtors convention in Hawaii. Bartlett was there trying to recruit local Southern California Realtors into his growing co-operative company, originally named Green Valley Realty. Kettle and Bartlett shook hands on an agreement that, in effect, allowed George Kettle to acquire the Master Franchise rights for the Mid-Atlantic region of Century 21 for a very modest fee and the promise to introduce other Realtors to the co-operative idea in his defined Mid-Atlantic area.

Franchising history was made that day and Century 21 International single handedly changed the Real Estate World by introducing agent training, television / print advertising, corporate brochures / marketing tools, brand name awareness and a ‘Bigger is Better’ national image which built the current real estate industry standards that were unknown at the time.

By 1978, advertising polls tested Century 21’s name recognition at nearly 98%. More people in the US knew of Century 21 than Ford, Cadillac, IBM or General Motors. It was a testament to the power of TV advertising and the massive advertising budget created by the monthly contributions of the 7,000 franchisees to the C21 advertising fund. Art Bartlett’s often repeated prediction that the National Real Estate market would be dominated by only 7 companies in ten years became a reality in his lifetime and he richly enjoyed it as did the Master Franchises and third party vendors that supported his dream with ideas, innovation and funding.

Trans World Corporation acquired Century 21, which had 28 Regional franchises with 7,000 franchisees in 1979 for Eighty Nine (89) million dollars. In the seven years from his humble start up in a California coffee shop, Bartlett’s vision and drive coupled with his leadership of the company’s Regional owners, a spirited group of franchisees, the C21 corporate and regional staffs and the supporting vendors was realized. It remains one of the most successful stories of pre-computer growth of any American company. This franchise success story hatched today’s continued interest in Regional or Master Franchising.

In the 1979 acquisition, very few of the Regional franchisees sold their regional rights to Trans World Corporation. Most of the master franchise owners were financially set; the Regions had long had mangers (Regional Directors) in place so there was little incentive to do anything but enjoy their businesses and semi-retire. Many Regional Owners became involved in real estate development, which was just a natural investment for them to make.

I joined Century 21 International as a corporate employee in the marketing department in 1978. As a young man at Century 21 International, I was given a lot of responsibility, earned numerous awards, traveled almost non-stop, was promoted three times, and resigned as a vice president of Marketing. I turned down my fourth promotion several times knowing in my heart that I wanted to start my own consulting company. In 1983, with the blessing and encouragement of Century 21 International, I began our consulting company. Century 21 was my first client and at that time, I specialized in franchise sales training and hands on Master Franchise recruiting. With my Century 21 experience and reputation, our consulting firm was successful from day one. So much so, that it shocked even me.

I will always be grateful for those that taught me, coached me, lead me, sponsored, and promoted me. I was in the right place at the right time and as a result played a small part in franchising history. My early involvement in Master Franchising shaped my life as a young man and continues to enhance it even today. It was an ‘once in a lifetime’ business experience for which I am most grateful.

Joe Camp, MPBC