How Apricot Lane is Creating Retail Boutiques with the Franchise Model
When you think of a franchise you don't often think of a boutique. Apricot Lane sells celebrity- inspired branded apparel but you don't need to start from scratch. These franchises allow entrepreneurs to start boutique businesses that are turn key. Check out our Apricot Lane Profile and our financial disclosure document.
1 . The usual profile of a boutique prides itself on individuality as well as exclusivity whereas most franchises are the exact opposite. Apricot Lane prides itself on being both a boutique and a franchise. How is Apricot Lane able to maintain its level of sophistication while offering franchising opportunity?
You are correct - it is very difficult to use the words, "flexible" and "franchise" in the same sentence! The flexibility comes with allowing our franchisees to cater their product mix to their local demographic. Florida fashion is different than North Dakota, Louisiana or California. The sophistication comes with the build-out, marketing, point of sale - inventory management system, intranet communications, buying resources and most importantly, the networking of franchisees across the country sharing fashion trends and what's working.
2 . In your opinion, why aren’t there many franchises specializing in women’s clothing?
Shhhh...We don't want to let the cat out of the bag just yet! It's true... You have the big national chains and then independent fashion boutiques all over the country and there is nobody in the middle providing the infrastructure and resources to the local boutique operators. With our 18 years of franchise experience, we enjoy filling this huge void in the fashion industry. A "boutique" must be unique, fast and flexible - that's what set's it apart from the nationals. The nationals need strict consistency to protect their brand and could never support allowing individual buying freedoms. The local boutiques run their businesses well, but transitioning to franchising is a completely different business model and is very expensive to set up initially with many potential pitfalls.
3 . Retail in general is a very tricky field to break into therefore investing in retail must be a huge risk. How is any retail franchise able to survive, especially during the recession? What is your success rate? Why do you think franchisee hopefuls should consider Apricot Lane over other fields of business such as food?
We are in the middle of the "perfect storm" right now. First, the nationals are sitting on the sidelines or cutting back store openings. Consequently, rents have come down and great locations are available. For example, we just opened at center court in Dallas Galleria with under proforma rents and a strong tenant allowance from the landlord to build out our store - two years ago, we would be on the 20 yard line with tenant allowance. The environment is perfect for actually reducing the risk for our franchisees with performance clauses, limited guaranties, low rents and strong landlord allowances.
Second, with the unemployment being so high, our lead flow is very strong with many qualified candidates who bring their first half finances and backgrounds in business, management, marketing or retail.
Third and most important, our concept is working in this economy. We have opened 19 stores so far this year with 3 more scheduled in the next several weeks. We have another 16 already scheduled for Spring 2011 with many of our franchisees taking advantage of the current real estate opportunities and opening their second, third and fifth stores.
4 . How does the parent company manage its franchisees? Is there are specific model that they must follow or are franchisees given more freedom to chose what brands to carry in their store, plan their own events and so forth?
We are all about recommendations, guidelines, support and encouragement in all aspects of their business. If it's a brand issue like marketing, website development or e-commerce - there is less flexibility. Franchisees are free to pick and choose from the resources we provide in the areas of marketing events, PR and social networking.
5 . What are some specific and instrumental skills that must be developed in order to run a retail store and what are some unique issues that may arise while running a retail franchise that would most likely never happen in any other field?
In almost every case, buying skills need to be developed. We teach franchisees to buy NOT just from their taste. We all learn from each other as we have buyers attending the regional fashion markets - these "buyers" are called franchisees who not only share what they buy, but more importantly - what's working in their stores.
6 . Can you detail the selection process? What does the executive committee search for in franchisee candidates? What is considered a “good fit?” In this regard, what are some of the reasons that a franchisee hopeful would be rejected? Are they encouraged to try again if they are able to evolve past these reasons?
We look for a candidate that has a "sense" of fashion with previous retail, business or marketing backgrounds as a strong plus. We want someone who can multitask, enjoys people and work within a system. We also want someone who is connected to the community and wants to use their Apricot Lane Boutique to give back to and support their communities. We shy away from those making decisions on just an emotional level or those not interested in actively working in and running the first store.
7 . Your website details an in depth training program before franchisee hopefuls can open their store but what exactly are you teaching them? Even with this, do you believe that those who have experience in retail are at a big advantage? Would Apricot Lane be willing to assist in hiring for the specific franchisees? Does Apricot Lane retain buyers for the franchisees or are the owners expected to understand enough about fashion to hire and organize on their own?
Our training program is extensive. It begins with a Home Training program where franchisees learn through videos, audio CD's and manuals our POS system, selling, marketing and financial planning. Then they come to Corporate Training for one week in Vacaville, CA. One of those days is a trip to the Los Angeles Fashion District for a big picture introduction of the fashion industry with our buyer. A visual merchandiser sets up their store and trains staff on merchandising at the store level and a store opener is provided for the opening. The we have an extensive 90 day post opening program with report analysis, conference calls and guidance to establish good habits and a strong foundation.
We also have continuing education through webinars, conventions at fashion markets and a monthly buying conference call to talk about what's working and what is not.
8. Any last words or any advice for franchisee hopefuls?
Find a business that matches your passion. Life is too short to hate going to work everyday. I'm blessed to love what I do - helping franchisees be successful in business.
Common Mistakes Made By the Franchisor Buyer During the Due Diligence Investigation
Franchise merger and acquisition talks always start with the best of intentions. After all, a well-executed franchise system merger can lead to enhanced scale (for increased buying power and leverage over suppliers), reduction of overhead and operating costs (through elimination of duplicate staff, departments, and locations), and increased revenue (through cross-selling of products or services, optimization of distribution channels, and bolstered brand recognition and standing in the eyes of prospective franchisees).
The Financially Distressed Franchisee
In dealing with an individual distressed franchisee, the following questions need to be asked:
Franchise Mergers and Acquisitions
There are several reasons for franchises to consider acquiring another franchise. It could give them the opportunity to add new products without the risk or cost of developing these offerings internally. It could help the buyer add new markets, geographically or demographically speaking, with an already strong existing brand. Acquiring a franchise supplier or distributor could build efficiency through vertical integration. Acquisitions can also help a franchise develop sufficient scale to compete with a larger rival more effectively.