Never mind that it was a dark January morning in Winnipeg and that their feet, encased in steel-toe boots, were frozen numb. Cameron Neufeld and Ben Hopper -- cousins, best friends and business partners -- put on their curly blue wigs, whipped out the company banner and began doing the 1-800-GOT-JUNK "wave" on the side of a busy road.
"It's a fun way to market outside the box," said Mr. Hopper who, together with Mr. Neufeld, bought a franchise two years ago from 1-800-GOT-JUNK, a Vancouver-based company that makes money by hauling away people's junk and charging them for the service. "You go out on a street where there's heavy traffic, put on a big blue wig and then you run around and wave at the passing cars."
Mr. Hopper and Mr. Neufeld are among tens of thousands of Canadians who have chosen to "get into business for yourself but not by yourself" by becoming franchisees -- owners of business units that operate as part of a system set by a franchisor, the company that owns the system.
There are about 76,000 franchisees and 1,200 franchisors in Canada, according to the Canadian Franchise Association in Toronto. About 20 cents of every dollar spent on goods and services in Canada is spent at a franchise business, the association says.
"The reason people buy a franchise is they're buying a safety factor -- they're buying a learning curve," says Lloyd Shears, president of FranNet, a franchise consulting firm in Vancouver. "Someone has already figured out how to do everything, right down to choosing the colour of the walls."
While joining a tried-and-tested system may give franchisees an edge over lone-wolf entrepreneurs, it doesn't guarantee success, Mr. Shears says. Factors such as location, the availability of workers and the franchisee's business skills can spell the difference between a healthy or limp operation.
The strength and history of the franchisor are also good predictors of a franchisee's success, Mr. Shears says. He generally recommends staying away from new and unproven franchise systems.
How much support and training a franchisor will provide are also important considerations, says Robert Arthurs, chief executive officer and president of Robert A. Arthurs International Inc., a Vancouver business consulting firm. Most franchisors provide training but some charge an additional fee for this. Others provide the training for free but may require franchisees to travel to another city, at their own expense, for the training.
Also, an unexpected shift in the marketplace can weaken a franchise, says Tim Shaw, president of MSA Consulting, a Toronto business consulting firm. "You might suddenly be facing a strong competitor coming in, or consumers' tastes could simply change."
By the summer of 2004, when Mr. Hopper and Mr. Neufeld began thinking about buying a franchise, 1-800-GOT-JUNK had about 140 franchises across Canada and the United States. But in Winnipeg, where the cousins were looking to set up shop, not very many had heard of the company, recalls Mr. Neufeld, a former golf course manager.
"There was no market presence at all in Winnipeg," he says. "Anybody who's not been out of the city would never even have heard about (1-800-GOT-JUNK), so that really presented a challenge."
Their family and friends weren't much help, either. Both men's parents were convinced the business would flop in Winnipeg. The more encouraging friends thought a junk removal franchise was a "neat concept" but one unlikely to provide the men with a good income.
Undaunted, the men researched the junk removal industry in Winnipeg and found that it barely existed.
"No one else in Winnipeg was doing what 1-800-GOT-JUNK was doing," Mr. Neufeld says. "We felt the city really needed this type of service."
The pair travelled to the "Junktion" -- 1-800-GOT-JUNK's head office in Vancouver -- where they met with the company's CEO and management team and asked and answered dozens of questions.
"One of my questions was, 'Tell me about the franchises that failed,' and they told me about every one of them," Mr. Neufeld says.
At the same time, the cousins had to convince the people at 1-800-GOT-JUNK that they had what it took to be successful franchisees.
Mr. Hopper says he believes his background in sales and marketing -- he worked as an inside sales representative for Manitoba Telecom Services Inc. -- and Mr. Neufeld's experience running a golf course, where he hired and managed several people, made them attractive to the Junktion team.
But while it helps to have business and management experience, it's more important that franchisees fit into the culture of the company, says Brian Scudamore, CEO and founder of 1-800-GOT-JUNK.
"What we're looking for is not so much experience because our systems are so strong, but a good cultural fit," he says. "When we're assessing prospective franchises, the questions we're asking are, 'Are they energetic? Are they enthusiastic, goal-oriented?' "
And can they follow a system? Mr. Scudamore asks. While running a successful franchise does require an entrepreneurial spirit, highly independent types who like things done their way will probably find the franchise model too restrictive, he says.
Mr. Neufeld says he was sold on the company as soon has he walked into the Junktion.
"I wasn't a hundred per cent sure until we walked in, and I could see that everybody loved their job and seemed genuinely happy to be there," he recalls. "The CEO was the most approachable person you ever met -- you walk into the head office and he greets you in less than five minutes."
With $50,000 each to invest -- they were told they needed at least $70,000 -- Mr. Neufeld and Mr. Hopper became 1-800-GOT-JUNK franchisees. They started with three franchise territories that had a combined population of about 750,000 people (the company's territory structure has since been changed).
They had one truck and no employees. "It was recommended to us that we stay on the truck at least in the beginning," Mr. Neufeld says. "It was the best thing we did -- we got to know the job before we hired people to do it."
Mr. Neufeld and Mr. Hopper leased a second truck within six months of buying their franchise and added a third truck by the end of the year. They also hired seven full-time employees.
Today, Mr. Neufeld and Mr. Hopper have four trucks on the road and eight full-time employees.
1-800-GOT-JUNK expects its franchisees to make at least $100,000 in revenue in their first year of business. Mr. Neufeld and Mr. Hopper made $320,000 in their first year, surpassing their target of $240,000. This year they say they are on track to hit their goal of $500,000.
The plan, Mr. Neufeld says, is to have seven trucks, 25 employees and $1-million in revenue by the end of 2008. Once they reach this level, they'll start looking at ways to increase their profits.
In the meantime, they've made sure there's always a pair of blue wigs -- one for each driver -- in each truck, along with a 1-800-GOT-JUNK banner.
"The best part of that is when people arrive at work, the first thing they'll talk about is how they saw these two crazy guys with blue hair waving on the side of the road," Mr. Neufeld says. "It's a good way of getting your business noticed."
