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Hungry for success

The Original SoupMan franchise started as a one-man, walk-up soup counter, Soup Kitchen International, in Manhattan.

Founder Al Yageneh opened his doors in 1974 and found fame from both his soup and his style — he was eventually parodied as the unbending “soup Nazi” on “Seinfeld.” Yageneh sold his store in 1984 and now sticks around the kitchen, creating new soup recipes for the business that continues to boom, only under another name.

There’s a recipe for success in food service, and it comes down to more than what’s on the menu — especially if you buy into a food-service franchise.

“A franchise is all about the rules,” said Robert Bertrand, president of The Original SoupMan. “You have to follow the business model. You have to know what you can and can’t sell and what you can and can’t do.”

The Original SoupMan joined the food-service franchise industry in 2005. It’s sold 171 franchises, and of those, 31 are up and running. Another 30 will open in 2008. It usually takes about six months to open an Original SoupMan location, though some franchises have gotten up and running in as few as four.

The secret ingredient

Food franchising has changed both the way people eat and the way the food business operates. But setting up and staying open are two different things. To get a good business started, you have to have sound financial resources. To keep it running, whatever you serve better be good, and you better be good at doing business.

“Our success is both the brand and the method,” Bertrand said. “Our soup is the draw for us, and our method is ease of preparation. There’s no in-store cooking. All the soups are flash-frozen and only have to be heated and served.”

Getting the money

So, what does it cost own your own Original SoupMan franchise?

Franchisees must come up with $35,000 for the franchise fee and anywhere from $125,000 to $300,000 for startup costs, including equipment and inventory.

Even small food franchises require startup money in addition to franchise fees. But it doesn’t all have to come from your own bank account.

Franchise companies assist with determining how much liquid capital you’ll need, how much is required for facilities, inventory and equipment, what you’re worth and where to get loans.

Some companies participate in the International Franchise Association’s VetFran program, to help ease veterans’ transition to business ownership through discounts.

Bearclaw Coffee Co. is one of them. “As a VetFran participant, we discount the franchise fee 15 percent for veterans,” so the fee is $20,875, said Tony Menyhart, franchise sales manager for Michigan-based Bearclaw Coffee Co. The company suggests new franchisees have $30,000 to $40,000 in liquid capital and finance the remainder of the estimated start-up of about $100,000, including equipment, signs, advertising, insurance, inventory and the interior and exterior of the required log-cabin facility.

Franchisees also pay a six percent royalty.

Success story

Tim Horvath was the first to buy a Bearclaw Coffee Co. franchise through VetFran. A 15-year member of the Michigan Air National Guard who previously served in the Army and Army National Guard, Horvath also works full time as a patrolman for the Westland, Mich., police department.

“I started looking into franchising when my military career was winding down,” Horvath said. “I was interested in what I would do for a retirement investment. After doing my research, I fell in love with Bearclaw. I talked with a few other franchisees as well as coffee competitors, and I could see that success is pretty much a guarantee. I bought it and opened my doors in September 2007.”

ON THE WEB

International Franchise Association

Veteran Transition Franchise Initiative

The Original SoupMan

Bearclaw Coffee Co.