A new lease on life: real estate franchising gets a fresh twist from one seasoned veteran

MICHAEL SHINN KNOWS A THING OR TWO about real estate. He was a Century 21 franchisee in the '70s and '80s and was a builder of speculative Hawaiian custom homes for more than seven years. It wasn't until recently, though, that he had an epiphany: Shinn envisioned a new means to homeownership, and Denver-based National Home Buyers Assistance (NHBPO was born.

Local NHBA franchises offer a one-year Lease/Option contract on single-family homes to credit-challenged buyers. Though lease-to-own property is not a novel concept, NHBA's twist is. Franchisees don't seek buyers for pre-owned houses; they let potential buyers select the property first. The franchisee purchases the selected home and leases it to the client for a 12-month period, after which the client has the option to buy. All a franchisee needs to get started is the $25,000 franchise fee and enough capital to buy the first home. No real estate experience is necessary, though many franchisees are former real estate or mortgage brokers. While franchisees work independently of any real estate office real estate agencies can offer previously unqualified buyers another option through a local NHBA franchise.

NHBA's formula relies on simple credit rehabilitation Franchisees collect above-market payments from potential buyers during the lease period, and these payments not only provide profits for the franchisee but also lay the groundwork for the buyer's home loan. NHBA supports franchisees wish semi-annual seminars, videoconferences and use of an escrow company to handle "all mortgage payments.

With decades of experience behind him, Shinn calls this franchise innovation "bulletproof." "We believe NHBA will become much larger than Century 21 or RE/MAX," Shinn says, "because it's more profitable to the franchisee."

Franchising since January 2003, NHBA had 62 franchises in 19 states by the end of last year.

Having It Nailed

A ZEST FOR WOODWORKING HELPED THIS ENTREPRENEUR GET OUT OF A RUT.

MORE THAN 20 YEARS AS AN ACCOUNTant and CFO left Jim Ford feeling dissatisfied and at a crossroad in his life. "[Accounting] was fun for a while; then it wasn't as much fun, and then it wasn't fun at all," he says. "I was looking for something else."

The answer arrived in the mail, printed on the back of a postcard. Woodcraft Supply Corp., a Parkersburg, West Virginia, company specializing in woodworking tools, supplies, books and classes, was seeking franchisees. Ford was a longtime shopper at Woodcraft and wasn't discouraged by the hefty price tag to become a franchisee. Investing $500,000 to $600,000, he opened a Woodcraft franchise in Portsmouth, New Hampshire, in November 1998.

With this decision, Ford got out of a discouraging career and surrounded himself with his favorite type of people: woodworkers. Ford thrives on the enthusiasm his customers bring to the store. "When people come to one of our stores, they're happy to be here," he says. "They look forward to the trip. It's a destination-type store."

Ford, 53, didn't stop at one franchise. In 2001, he teamed with former Woodcraft regional manager George Snyder, 37, to open a store in East Greenwich, Rhode Island. Since then, the two have opened another branch in Jacksonville, Florida. Recently, even Ford's wife, Julie, was encouraged to quit her job as a senior programmer and jump on board. While more stores mean more sales--2004 sales are projected to reach $5 million to $6 million--it also means more paperwork. "I have less time on the floor selling and more time slipping into that accounting role," Ford says.

Applying his accounting skills once more, Ford's life has come full circle. But this time, he is much happier with the direction it's going. "There's never a day when I don't drive in and look forward to it," he says. "I can't say that of my other jobs. That's the bottom line. I enjoy it."--Sam Wilson

WHAT'S NEW

PREPARED FOR TAKEOFF

Toys that go up, down and all around are Air Traffic Retail Franchise Systems' specialty. Filling its shelves with kites, juggling equipment and skill-based playthings, this toy store encourages customers to play at any one of its four locations. Now this 10-year-old company is inviting entrepreneurs to share in the fun. Six to 10 franchises are expected within the year, the majority located inside malls.

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