What's the difference between a locally-owned franchise location and a chain?
Let's say I decide to open "Becky's Restaurant." I would own it, create all of the recipes, design the menu, sign and marketing graphics, and plan and build the interior and exterior of the restaurant.
All of the profits I made at Becky's Restaurant would stay with the local owner. This type of establishment is the kind that many people consider to be "local."
In a franchise, the franchise operators own the location. They do all the daily work. However, they don't have to create everything from the ground up. The franchisor team creates the recipes, designs the menu, signs and other graphics, and plans the interior of the restaurant - all of which takes a lot of pressure off of the franchisee.
The franchisee agrees to pay a percentage of the sales in royalties to the franchisor for the use of the company's name and services. In the case of a restaurant, like The Melting Pot, this percentage is very low. About 95 percent of our profits from The Melting Pot stay with us in Tulsa.
The Melting Pot is only one of many local franchises in Tulsa. Other recognizable examples are Merry Maids, UPS Store, All State Insurance and Marble Slab Creamery.
In a chain business, one parent company owns all of the business locations. Managers are hired and paid on salary. There might be some profit-sharing with each location's general manager, but the majority of the profits do not remain local. The money goes to the parent company, wherever it is located.
Franchisees invest their savings or borrow from banks to bring new concepts, brands, products and services to Tulsa. They often borrow from neighborhood banks. They staff with local talent.
As a Melting Pot franchisee, we employ people from the metro area, including many Oral Roberts University and Jenks High School students. We support the community and choose to participate in fundraisers and local charities through in-house events. We handle all of our own maintenance and buy advertising on the local level.
We source food and beverages locally, even featuring Oklahoma wines like StableRidge and Tulsa Deco. Furthermore, the profits we make from our restaurant are plugged back into our local economy because my family dines at other local restaurants, shops at local businesses, invests in school tuition and pays Oklahoma taxes.
I challenge you to think about dining or buying local in another way. QuikTrip Corp., Arby's and Mazzio's Corp. are just a few large Tulsa-owned businesses with a national presence. Would you want people in another city or state to shun buying gas from QuipTrip or picking up a pizza from Mazzio's because it's not local to them?
I wouldn't want these brands to lose business because people in other states didn't want to spend money at establishments that are not headquartered in their area.
I'm not discouraging dining or buying local. Dining and buying local is always a great idea. Anything we can do to keep our money in the Tulsa area and power our local economy is good. I just want to dispel the myth about franchises.
Don't automatically discount franchises and their owners. They're local, too!
Becky Chapman is owner of The Melting Pot, a locally-owned franchise restaurant at 300 Riverwalk Terrance in Jenks. The views expressed here are those of the author and not necessarily the Tulsa World. To inquire about writing a Business Viewpoint column, email a short outline of the article to Business Editor Rod Walton at
rod.walton@tulsaworld.com. The column should focus on a business trend; the outlook for the city, state or an industry; or a topic of interest in an area of the writer's expertise. Articles should not promote a business or be overly political in nature.
Original Print Headline: Franchises are local businesses, too
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