Lori DeBerry knew it was time to consiDer going into business for herself when she and her husband, Joe, realized the same thing at the same moment: “we were working really long and hard—for someone else,” she says.

That’s when Lori, 33, a salesperson for a medical company, and Joe, 38, a university fund-raiser, decided to put their business skills to use for themselves. But the Tulsa, OK, couple, parents of Alia, 1, weren’t interested in the long learning curve that comes with starting a new venture from scratch. Instead, they looked to franchises. After a rigorous search they chose cartridge world, a 1,600-store chain based in Emeryville, CA, that refills printer cartridges. “We were looking for something with a simple product that was easy to sell,” explains Lori. The couple used a $200,000 small business loan to open the franchise 18 months ago. They broke even in their first year and expect to turn a profit after their second full year in business.

But what really convinced Lori and Joe that cartridge world was the right choice for them was the chance to help the earth by keeping a bunch of office waste out of landfills. “my environmental awareness started at an early age,” explains Lori, who does most of the marketing and administrative work from home. “and as a mother, you’re always looking at how you can leave the planet a better place for your child.” that’s why her customers receive end-of-the-year certificates detailing how much waste they helped keep out of landfills by recycling. “that way,” she says, “they can market themselves as green companies.”

For many working mothers considering self-employment, finding a profitable venture that combines eco-friendly with family-friendly is a bit like finding the entrepreneurial Holy Grail. But these days, a growing number of franchises are making it easier to go green—and earn green. From pizzerias to carpet cleaners, green franchises probably make up some 10 percent to 15 percent of all franchises, estimates Lori Kiser-Block, a 20-year veteran of franchising and president of FranChoice, a Minneapolis-based firm that helps match potential franchisees with businesses. And in some industries, like residential and commercial cleaning companies, she surmises the numbers could be higher, with 50 to 60 percent using green products.

There are plenty of reasons for franchisors to flock to more sustainable practices. To start, the health and wellness market totaled $103 billion in 2007, according to the Natural Marketing Institute, a market research firm. And a recent survey by Yahoo! found that 77 percent of consumers polled identified themselves as green, while 57 percent reported making a green purchasing decision in the past six months. “The interest in marketing as a green franchise is growing out there,” notes Alisa Harrison, a spokeswoman for the International Franchise Association in Washington, DC.

Despite such interest, however, researchers have yet to prove green businesses are more profitable than nongreen ones. Kiser-Block, for example, says she hasn’t seen a notable difference in the start-up costs—or longevity—of green franchises compared with more traditional businesses. “My experience is that hard work, drive, energy and enthusiasm are bigger indicators for success,” she says. Many green franchisors do say, however, that environmentally sound practices give them a marketing edge.

That’s certainly been the case for Ecowash Mobile, an Australian car-wash chain that has expanded to 85 franchisees in 18 countries, including the United States, since it opened in 2004 and has about $5.6 million in annual sales. The franchises clean customers’ vehicles with a biodegradable solution, a strong selling point when water conservation is top of mind. “We’re the largest waterless car wash in the world,” says Mike Watorski, vice president of Ecowash Mobile, where the bulk of the initial investment is $29,950 for the franchise fee, plus $15,000 for an official Ecowash car.

Franchising may give you a running start on going green, but it’s not for everyone. For example, most franchises leave little room for personal input because franchisors have already found steps that work: They’ve built successful brands and expect their franchisees to run units in the uniform way outlined in their contracts and manuals. “We don’t want anyone to come into the business whom we can’t set up for success,” explains Tania Hall, a spokeswoman for Vancouver-based 1-800-Got-Junk, a junk-removal service whose close to 300 franchise partners in 179 locations are involved in a companywide effort to use more green disposal methods. “We’ve got tried-and-true systems.” At 1-800-Got Junk, an initial investment in the chain, which had $126 million in revenue in 2007, usually starts at about $100,000, and Hall says it’s typical for a new franchise to reach profitability within six to 18 months.

Many prospective franchisees don’t realize they may need management experience. “Most franchise companies don’t want you to make sandwiches or change oil,” says Steve Richards, who recruits franchisees for both big and small chains as president of The Franchise Specialist, based in Atlanta. “They want you to run a business for them.”
Buying a franchise can be expensive. Initial investments may start at $20,000 or $30,000 even for very small chains. Owners at Naturell, a young carpet-cleaning chain in the Bay Area that uses an organic solution made from sea kelp, invest some $20,000 (which includes a franchise fee and other expenses) and may need to purchase a van or truck if they don’t have one already. By comparison, start-up costs for more established franchises, such as the resale clothing and accessory shops Once Upon a Child and Plato’s Closet, can run $175,000 to $225,000 or more once expenses like franchise fees and inventory costs are included.

In these tougher economic times, some franchise chains have begun avoiding potential franchisees who must borrow most of their start-up costs. To improve success rates, many franchisors and lenders now want to see substantial cash and liquid assets that can be used as collateral for loans you may need down the road. “The number one reason small businesses fail is they are undercapitalized,” explains Steve Murphy, president of franchising at Winmark, a Golden Valley, MN–based company that generated $31.1 million in annual sales in 2007 running Once Upon a Child, Plato’s Closet and two other used-goods chains, Play It Again Sports and Music Go Round. “We don’t want franchisees to be too highly leveraged when they walk in the door.”

If you want to run a business but don’t want to bear all the uncertainty and risk yourself, franchising might be a good fit. To find a chain that’s right for you, consider these strategies: narrow the field. Close to 3,000 companies in about 80 industries offer franchises, according to the International Franchise Association (IFA), an industry membership organization that promotes best practices. Winnowing your options can be daunting. Check out groups such as the IFA and companies like FranChoice and FRANdata for info on the choices out there. Also consider talking with a franchise broker for ideas.

Consultants such as The Franchise Specialist’s Steve Richards are paid by particular groups of franchisors, so they will typically know the most about the companies they represent. There’s usually no charge, and they can give you a general idea of how well your skills and goals might match particular types of franchises. Many will also help you assess your financial situation and prequalify you to buy a franchise so you don’t waste time looking at chains for which the entry price is too steep. You can find a consultant through franchising organizations such as the IFA.

Tap your talents. Prospective franchisees are more likely to find a welcoming climate in industries similar to their own. “They should look for a business in which they have experience, so there is less of a learning curve,” advises Randy Romano, executive vice president of Pizza Fusion, an organic pizza chain based in Fort Lauderdale, FL, that typically chooses franchisees with a background in restaurant management.

Do an ethics check. The franchising world has faced its share of scams. The Federal Trade Commission (FTC) offers publications on franchising that can help you spot warning signs. Also check with the FTC and Better Business Bureau in areas where the franchise has units to find out whether the company has had any complaints. And do your own background checking as well:

The Franchise Disclosure Document will provide contact information for existing franchisees. “I’d call the franchisees or, better yet, visit some in my surrounding area to see how they like the company,” says Dina Dwyer-Owens, IFA chairwoman and chairwoman and CEO of the Dwyer Group, a Waco, TX, holding company for six franchises.

Seek proof of green claims. “Greenwashing,” or exaggerating a company’s environmental claims for marketing reasons, is a growing issue across the entire business landscape. Ask for outside verification of a franchise’s ecopractices. For instance, Maid Brigade, a housecleaning chain, uses environmentally friendly cleaners that have been certified by Green Seal, a nonprofit that evaluates whether specific products are environmentally preferable. Start-up costs for Maid Brigade range from $87,000 to $132,000, including franchise fees from $29,500 to $58,500.

Think long term. Read the Franchise Disclosure Document from any chain you are seriously considering. This document, which every chain must provide by law, will offer vital information, including the company’s history and how it’s doing financially, as well as information on pending lawsuits. Dwyer-Owens also suggests doing your own research: “If you can’t Google the industry and get a lot of information, I’d be very concerned.”
 

Fast-Growing Franchises

Combining eco-friendly practices with mass appeal, these green franchises are sprouting interest.

NaturaLawn of America
With some 68 locations in 23 states, this innovator, launched in 1987, has changed the lawn-care industry with its use of organic-based products and integrated pest management (naturalawn.com).
Pizza Fusion Known for its mostly organic menu, this young company, launched in 2006, relies on hybrid delivery vehicles, offsets all of its energy consumption by purchasing renewable wind energy certificates and operates LEED-certified restaurants. In addition to 20 units currently, it has more than 75 franchise commitments in 15 states (pizzafusion.com).

ServiceMaster Clean
The venerable franchise chain, founded in 1947, provides domestic and commercial cleaning. It has more than 4,500 franchises in 50 states and 15 other countries and has developed its own line of cleaning products, which have received three certifications for their environmental benefits (servicemasterclean.com).

Splish Salon Systems
Bringing natural and organic hair products to the masses in custom-designed green buildings, this Keystone, CO–based chain, founded in 2007, is scheduled to open nine franchise locations by 2010 (mysplish.com).