What is Wireless Zone and what does the company do?
Wireless Zone is the largest wireless franchise in the country with over 375 locations in 21 states. Corporately, we currently have 101 employees of which 75 reside in our main offices in Middletown. Unlike multi-career wireless franchises, Wireless Zone has an exclusive relationship with Verizon Wireless. This allows franchise owners to carry only one set of merchandise instead of multiple versions, enjoy preferred treatment and pricing, and cash in on residuals.
You’ve had sharp growth in recent years with the addition of 39 new units in 2007, 60 in 2008, and on pace to add nearly 100 units in 2009 and break $180 million in service revenue. What do you attribute that too?
Wireless Zone’s growth is based on four initiatives. First, we hired a vice president of franchise sales two years ago with extensive experience. He has brought our level of lead management to a whole new level. Secondly, the economy has brought to us a number of qualified prospects eager to own their own business after being downsized. Our commitment to our existing franchisees and the future of our business has led a number of existing owners to expand. Finally, just before the economy went sour, Wireless Zone decided that at the end of 2009, we would have 400 operating stores.
A lot of companies have complained about credit not being available. How has Wireless Zone been able to find financing to be able to sign an average of 10 new units per month this year?
What’s interesting about our model is that the cost of entry is below that of other franchise organizations. Most of Wireless Zone owners are able to secure loans because they are typically under $100,000. Our 21-year history of success helps in dealing with the banks because they are more apt to give a loan to someone joining an already successful business model. This year due to the economy and layoffs, Wireless Zone is seeing a number of people coming in and able to finance through severance packages and retirement funds without the need to borrow from the bank. This speeds up the process for the owner and allows them to open sooner and thus start earning income quicker as well. Corporately, Wireless Zone budgeted for this growth and put aside the necessary capital to increase our franchise sales staff and the additional support our stores would need in terms of credit lines and other programs.
Has the company changed the way its approaches its lenders in terms of trying to find financing in this economy?
We have had a longstanding relationship with our current bank and they have given us the flexibility to grow while keeping them apart of our overall business plan. As it relates to our other vendors, like our store displays, phones and accessories, we are actually in better shape than we were a year ago. Due to our growth this year, we have been able to increase our business with most of our vendors essentially lowering our costs to us and our franchisees. It has been a win-win for both.
