For Affordable Homes of South Texas (AHSTI) director Bobby Calvillo, whose job it is to help his organization build enough homes to meet the needs of low-income South Texan families, creating the means for having a constant positive cash flow was a top priority.
So in 2012, Calvillo convinced the AHSTI board to build a Blimpie restaurant in Weslaco, Texas.
In a recent Franchise Players Q&A interview, Calvillo talks with Entrepreneur.com’s Kate Taylor about how he managed to fund a nonprofit organization by opening a for-profit franchise.
Given the strong presence Sintel Systems has in the retail, restaurant and service industries’ point of sale marketplace, we share these service sector growth trends with our customers and franchise hopefuls looking for key insights and opportunities in order to help them make the best decisions from the very beginning.
The diversity of motivations among franchise-seeking entrepreneurs becomes clear in Cavillo’s intriguing Q&A. Here are the highlights of Taylor’s post, “A Nonprofit Director Raises Funds With a Blimpie Franchise”:
• Cavillo has been with AHSTI for 19 years and he still functions as the executive director of Affordable Homes of South Texas, Inc. (AHSTI), the non-profit that created Esperanza on Fifth, LLC which owns the Blimpie Weslaco franchise.
• In franchising Cavillo and the AHSTI board saw a business opportunity with minimal startup costs and up-front investment. “Franchising seemed the logical choice and it also offered individual and corporate support that could guide us through the startup and general operations of the business,” Cavillo says. “Running a franchise and a non-profit are not all that different from each other, they both are run as a business, but the franchise posed some unique challenges that are new to us.”
• Blimpie’s smaller franchise fee was appealing and, in the AHSTI board’s opinion, the franchiser had an overall better product for Weslaco’s downtown market area. Cavillo tells Taylor that Blimpie also understood the social enterprise concept, has embraced it and provided exceptional support for AHSTI.
• Cavillo estimates that AHSTI spent about $200,000 before officially opening for business; broken down as build-out ($100,000), equipment ($75,000) and other startup costs and inventory.
• Cavillo received advice from friends, other franchisees and AHSTI’s own internal research from its various departments and experienced staff.
• Among the challenges in opening the franchise was finding the right team to run the store. AHSTI had to reframe the search parameters in seeking individuals with a different set of skills and experience than the non-profit would typically employ. “Fortunately, we were able to find the store manager and assistant store manager without much difficulty,” Cavillo says. “The assistant store manager was a previous Blimpie employee for a store in the area that closed which helped tremendously.”
• To other franchisee hopefuls Cavillo recommends researching potential franchisors thoroughly, and go beyond just finding out franchising fee information. The research should also incorporate some knowledge of the corporate support including the people factor, because the business relationship has to be one that can provide benefits for both parties.
• Cavillo also believes franchisees must love the product they sell. “You can’t really sell something you don’t truly believe in.”
• The AHSTI hopes to expand the franchise to other sites and open future stores, once the store is stabilized. “We really see the potential, we just need to continue to develop it going forward,” Cavillo says.
Read Kate Taylor’s full Entrepreneur.com Q&A with Bobby Calvillo here.
For more insights into franchising and the franchise-seeking mindset, check out our related posts, In Franchising, Women Find Empowerment, A Veteran, A Franchise Player, The Baby Boomer Franchising Boom, and Now’s A Good Time for Good Timing.
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