Franchisors Poised for Significant Growth in Maryland in the Months Ahead

May 6, 2013

The first quarter of 2013 proved to be kind to franchise businesses aiming to enter Howard and Anne Arundel counties, the BWI Business District and elsewhere in the state.

Many franchise businesses from a variety of industries have strategic plans in place to expand in and around central Maryland in the months ahead, beginning with outreach efforts to area entrepreneurs and investors looking for a fresh start or another path.

‘Vibrant Local Economy’

“We see the region as an ideal market for new business growth — there aren’t many like it in the country,” said Bill Redfern, CEO and founder of A Buyer’s Choice Home Inspections, a Pompano Beach, Fla.-based home inspection franchise poised to triple the size of its United States franchise base by 2015.

“In central Maryland, business, housing, retail and entertainment come together to form a bustling, vibrant local economy,” he noted. “As a company in the real estate sector, weare excited by the prospects of adding new franchise offices in this region — we are actively having those conversations right now.”

A Buyer’s Choice Home Inspections is offering a limited-time $20,000 franchise fee for U.S. investors interested in the franchise opportunity. Redfern and his team are betting on a recovering housing market in Maryland and across the United States.

“If it pays off — which our track record shows it will — our franchise investors here in central Maryland will be living very well-balanced lifestyles owning and operating a professionally certified home inspection company in their own community,” Redfern said.

Redfern is seeking five to seven investors in the area looking to own and operate their own home inspection business.

Expanding Opportunities

Lenny Verkhoglaz, CEO and co-founder of Executive Care, a Hackensack, N.J.-based home care franchise, echoes Redfern’s enthusiasm for the business growth opportunities in central Maryland. Verkhoglaz says his company has done its research and “is ready and willing to invest its resources into the area.”

“We are fortunate, as a home care company, to be in an evergreen sector that is booming,” Verkhoglaz said. According to Bureau of Labor statistics, the United States will add more than 1.3 million health and personal care aids by 2020. The number of home care franchises operating around the nation has ballooned, as home care has grown steadily and survived the Great Recession with unmatched strength.

Verkhoglaz’s company has the wherewithal to grow into central Maryland and across the state; its business model includes embedding itself into the local communities it serves, empowering franchise operators to create organic relationships in their territories and partnering with local hospitals to help curb readmissions.

A particular clause in the Affordable Care Act encourages hospitals to refer patients to home care companies to help the hospitals avoid Medicare readmission penalties. “That part of Obamacare has provided our company with a promising referral source,” Verkhoglaz said. “Our franchisees will gain that knowledge base from our home office.” Verkhoglaz anticipates adding several franchise offices across central Maryland.

And another company adding fuel to the franchise growth fire in Maryland is Instant Imprints, a marketing solutions company that partners with local small business owners.

“Central Maryland has a growing number of thriving small businesses that need marketing support,” said Ralph Askar, president and CEO of Instant Imprints. “We know as competition grows in the area, businesses will need our services. Our plan allows us to rapidly expand our presence here.”

Franchise Sales on the Rise

Several compelling statistics from a 2013 outlook report released by the International Franchise Association (updated March 2013 to reflect first-quarter findings) indicate that franchise sales are on the rise in the United States. The projections include the following.

The number of franchise establishments in the U.S. will increase by 1.3% in 2013, just short of the 1.5% growth in 2012. • The number of jobs in franchise establishments will increase by 1.9% in 2013 (following a gain of 2.1% in 2012), from 8.1 million to 8.257 million — an increase of 156,000.

•The output of franchisee establishments in nominal dollars in 2013 will increase 4.2% (following a 4.9% increase in 2012), from $769 billion to $802 billion (an increase of $33 billion).

•Also, the gross domestic product (GDP) of the franchise sector is projected to increase 4% in 2013 (following a 4.6% increase in 2012) from $454 billion to $472 billion (an increase of $18 billion). This is approximately 3.4% of U.S. GDP in nominal dollars.

Maryland-based franchisor Patrice Rice, of Patrice & Associates, can attest for the state of the franchise industry in the Old Line State.

“The conversations I’m having with our local franchisees here validate what my company is noticing: Maryland is growing, and franchise businesses are finding the central part of the state to be an increasingly attractive space to build a presence.”

Rice is a longtime franchisor in the state, having launched her Dunkirk-based hospitality and restaurant recruiting franchise in 1989 out of her basement. She now manages close to 50 franchise offices across dozens of states nationwide.

Joe Caruso, a franchise development consultant in the region and president of the Capital Area Franchise Association (CARA), is also witnessing continued activity in the franchising sector in and around the Capital District.

“The franchising outlook for Maryland has been very strong both for franchisors aiming to expand in the state and for franchisors based here or already with a strong presence in this state,” Caruso said. “This especially holds true for the Capital District.”

As an example within the restaurant sector, Caruso noted a new franchise concept to Maryland, Hurricane Grill & Wings, which opened its first location in Elkton, Md., earlier this year and is planning additional restaurants in Maryland.

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