Raking In The Blue Chips

(Tuesday, January 05, 1999) - They work in very different worlds-one surrounded by bright colors, another in perpetual darkness; one amid crushed fenders, another where the air is scented by freshly cut wood-but they share on thing: They have met uncommon challenges with uncommon energy and ingenuity.

They are the entrepreneurs who head the four companies chosen as national Blue Chip Enterprises in the annual competition co-sponsored by Massachusetts Mutual Life Insurance Co. (known as MassMutual-The Blue Chip Company), the U.S. Chamber of Commerce, Nation's Business, and "First Business", the Chamber's half-hour morning business-news television program sponsored by MassMutual.

The national Blue Chip Enterprises were chosen from among 168 companies named earlier this year as Blue Chip Enterprises. (For a complete list of companies honored nationwide, see the March issue of Nation's Business.) This year's national designees are:

Candy Bouquet International, Inc., of Little Rock, Ark.
Narrative Television Network of Tulsa, Okla.
Three-C Body Shop Inc. of Columbus, Ohio.
American Hardwood Co. of Gardena, Calif.
Here are their stories.

Candy Bouquet International
One key to business success, Margaret McEntire suggests, is to give away your merchandise.

Months before she opened a tiny retail store in the vestibule of a Little Rock bank in 1992, she gave away dozens of free samples to merchants in the Pulaski Heights shopping area-restaurants, doctors' offices, beauty shops, dry cleaners, "everywhere the middle-aged housewife goes during the day," she says. "They're going to see it, think it's a neat idea, pick up that business card, and call you."

McEntire was giving away bouquets whose "blossoms" were not flowers but candies. "No one ever turned me down," she says of the local businesses that took her free samples. When a bouquet had been devoured, she would provide another one.

That was only an opening move in what has turned out to be a winning strategy. McEntire began offering Candy Bouquet franchises in 1993, and her company, Candy Bouquet International, now has more than 250 franchises. Last year's sales volume for the chain was $26 million, up from $14 million in 1996.

McEntire, 45, started her business at home, and around 20 percent of her franchises are home-based. "It makes us have a great success rate [only two franchises have failed outright] because they can start out" with an investment as low as $7,000, she says, "and then gradually work into big stores."

McEntire was making candy bouquets in her garage, "kind of for fun," she says, when "friends started saying they wanted them." She quickly realized that she had a potentially viable business on her hands.

Her first Candy Bouquet store opened not in Little Rock but in Houston in 1989; one of her sorority sisters from the University of Arkansas opened it, as an equal partner. McEntire knows better now, but at that time she feared that Little Rock might be too small a market. (There are now seven franchises in the Little Rock area.)

The Houston store was doing "dynamite business," McEntire says, but then her friend's husband lost his job and the couple decided to leave Houston; she called McEntire around the end of 1991 and said she was closing the store. McEntire's husband, Jay, was suffering business reverses himself-he was drilling for oil and gas at a time when the energy industry was sagging. "We were at a low ebb," McEntire says.

McEntire had continued to make bouquets in her garage even while the Houston store was open, and she kept doing so after that store closed. She opened her Little Rock shop in August 1992, after her business had grown to the point that the bouquets "had started taking over the house," she says. Her first space was only 90 square feet, but she squeezed in 45 bouquets. She had put plans for franchising on hold after the Houston store closed. Within a few months of the Little Rock store's opening , though, she had decided to take that plunge.

The McEntires drew up their franchise documents and shepherded them through the various state governments, over the course of a year, without ever enlisting an attorney's help. Candy Bouquet was registered in all the states by late 1993, and franchising has since proceeded at an accelerating pace, with franchises now as far afield as Malaysia and the Persian Gulf.

Candy Bouquet's franchisees don't pay royalties. They pay an initial franchise fee, but after that they pay only a monthly "association fee" of $35 to $200-just enough to cover her overhead, McEntire says. Her profit thus must come from her warehouse-an incentive not only to keep her prices competitive, she says, but also to find exclusive products, including even the wire that holds the bouquets together, which was " invented just for us."

Because she doesn't charge royalties, McEntire says, "I'm not making as much money as most [franchisors]. Not anywhere near. But I'm looking on down the road." For one thing, she says, she has a very open relationship with her franchisees: "They share ideas with us."

Thanks in part to the free flow of ideas, the bouquets themselves have changed a lot. Her earliest bouquets were puny compared with the current productions, McEntire says; the first ones were much shorter, and decorated with "junk candy" instead of the private-label candies and chocolate rosebuds that her franchisees use now.

New franchisees spend a week in Little Rock learning how to make 10 basic designs, but otherwise there's "a lot of freedom of design," she says. McEntire is shooting for 1,000 franchises by 2000, and she relishes the thought of the challenges that such very small company, with only a half dozen full-time employees. "I'm a very active person," she says. "I can't sit still."

To date, Candy Bouquet International, Inc. has over 815 franchises worldwide. Representing all 50 states, 40 countries, and the territories of Puerto Rico and Guam. More home business franchise and retail business franchise opportunities are available.

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