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StumbleRecession allows franchises to expand, enter market
Regina De La Pena and her mother, Gina De La Pena, scoop toppings on frozen yogurt creations at Cherry On Top, a new frozen yogurt store in Summerlin. The store, where customers create their own desserts, is the first of the franchise to open in Las Vegas. Even as many retailers and food establishments are struggling to outlast the recession, new franchises are entering the market or expanding their foothold.
Friday, Aug. 27, 2010 | 2 a.m.
Sun coverage
Even as many retailers and food establishments are struggling to outlast the recession, franchises and chains are entering the market or expanding their footholds.
Some are taking advantage of the sharp decline in rent, the availability of storefronts at high-traffic shopping centers and declining competition.
Newcomers to the Southern Nevada market include furniture stores, hobby craft stores, sandwich shops, yogurt shops and restaurants.
“We are doing this for the long term,” said Loren Kreiss, spokesman for San Diego-based Kreiss furnishings, which in July at Town Square opened its 14th U.S. store. “We see the benefits when others are shying away. It is an opportunity for us to get in the market. Our strategy is to double down where we see the growth.”
Some retailers are willing to spend hundreds of thousands of dollars to jump into the Las Vegas market.
That includes Robert Davis, owner of the state’s first Which Wich? Superior Sandwiches, which opened this month in a northwest valley shopping center that had no other fast-food outlets. The Dallas-based chain has more than 110 franchises across the country, and Davis said he hopes to turn his one franchise into 15 to 20 in Las Vegas over the next five to seven years.
“Any business venture is going to be a risk, but this country is founded on entrepreneurs,” Davis said. “You have to remember that there is in any recession a lot of opportunities as well. The opportunity is, we got into a center that didn’t have a lot of competition, the rents were lower and we could get the staffing.”
Todd Miller opened a Cherry on Top frozen yogurt franchise in Summerlin, betting that “just because the national economy and local economy are in recession doesn’t mean a segment of the marketplace can’t be profitable. We are not always going to be in a recession.”
The recession does have its benefits: Miller says his rent is about a third of what was charged several years ago.
The parking lot was full Thursday at the Hobby Lobby in Henderson. The store, the 441st in the chain, opened Monday in a 51,000-square-foot space formerly occupied by a Von's supermarket. Even as many retailers and food establishments are struggling to outlast the recession, new franchises are entering the market or expanding their foothold.
Miller said he is pressing to open a second location near the Las Vegas Beltway and Rainbow Boulevard.
He will have competition: Tennessee-based Tasti D-Lite, a low-calorie frozen dessert chain, wants to open 15 Southern Nevada franchises in coming years.
Opening a franchise can run into the mid-six figures, with yogurt machines costing $15,000 each and six used per store, Miller said. Financing is difficult to obtain, and business owners have to front the money or get investors, he said.
On the other hand, preparing storefronts for new businesses costs about 20 to 30 percent less these days because of competition among contractors.
Even existing restaurant chains in Las Vegas are finding opportunities during the recession.
Sweet Tomatoes recently opened its third — but smaller — salad buffet restaurant on West Flamingo Road in the Metreon Las Vegas Shopping Center.
Tracy Marks, spokeswoman for San Diego-based Garden Fresh Restaurant Corp., said the company, which has 115 locations in 15 states, won’t let the recession deter its expansion plans. She also cites cheaper space and the availability of premium space that had been taken in the past.
“We are focusing on a market already developed, and it seemed like a great chance to expand so our customers can be closer to us,” Marks said.
A new entry to the market is Hobby Lobby, an Oklahoma City-based chain of about 450 stores in nearly 40 states that opened this week in Henderson.
“Because of the economy, stores have closed and more retail space has become available, which leaves an open building for us to be able to move into,” said the company’s Vince Parker.
Georgia-based Citi Trends, a discount clothing retailer, made its entry into Las Vegas this month with the newest of its more than 420 stores in 25 states.
“We were shipping (to California) anyway, so it made sense (to open a store in Nevada),” said Bruce Smith, the company’s chief financial officer. “And we saw some opportunities in Las Vegas.”
As for concerns about opening during a recession: “It is not like we are selling luxury goods that people shy away from in this economy,” Smith said.
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Wow a Hobby Lobby! I've only seen one of those when I visit my family in Ohio. Glad there is finally one close to me now.
Classy..
Must be the most delicious store in Nevada. Frozen yogurt is w/o sugar and no-fat, is the best sourceof calcium and gelatin for menopausal females and men available otc. Much less calories than in ice cream and more wholesome and gives the dairy farmers and alfalfa growers in the Mid-west more outlets for their No#l bales.
New Orleans is being featured this morning on Big Al's show and the Mid-west ag. products was mentioned as a source of jobs for a lot of New Orleans. Next time you see Starbeams, remember where we are coming from and where we have been.
cinderella: They are the typical uneducated people that don't understand laws and rules (or english). They should check citizenships at the door.
I applaud these stores on opening...the small business man is what drives America and they hire more people than the Fortune 500 COMBINED !!! If Obama would only see that and help the group out, America would pull itself out of the DEPRESSION ! And yes folks, it is a Depression as finally admitted by an economist who had the Ba**s to stand up and say it..
Sorry,but before I would dump alot of money into a no-name sandwich shop nobody has ever heard of around here and pay the huge franchise fee and then all the ongoing roalty fees on top of that,I would spend a day trying to come up with a little snazzier name.Spend another day looking through cookbooks at the library.Try a few combinations for awhile to see what's working,and stick with that.How hard is it to make a sandwich anyways.Just think of all the reserves of cash they would have had to ride out this recession!I'm a do it yourself if you want it done right kida guy.Each to their own.Good luck,really do hope it pans out for ya!
you backward-thinking grumpy old negative blow-hards...you know who you are sevenhills, etc., who feel the need to spout your ugliness and go off on tangents that aren't related to the news make me embarrassed for you. we get one story relating good news for our economy, and you can find nothing better to do than moan and groan, and use the posting board to further your bigoted, ugly agendas. shame on you all. go find a coffee shop somewhere and moan and groan to each other. the rest of us productive citizens don't want to hear it. and shame on the sun for allowing these creeps to monopolize the comment boards. get rid of anonymous commenting and you'll get rid of these ugly comments. if you all feel so strongly about your hateful beliefs, i challenge you to start posting using your real names.
It sounds like you have had a little too much whirrled peas already, Cindy.But hey,if it works for u,start a franchise.Iv'e seen from your other posts your pretty creative in saving your money!
Buck wrote a really good article on franchises - people do not always realize these are about the most frequent forms of small businesses and provide a lot of jobs. Despite some bad apples among franchises - most of the successful ones reduce risk and only succeed if the franchisee succeeds. Now how the conversation on the article devolved into something very strange because of the color of children in shopping carts - well that is somewhat disturbing.
I think it started with cinderella on her lawsuit alert.Read some of her recent past posts and u might come to the opinion the alert was how to make some money for yourself!
devilswin99 - lol anchor babies
I agree with NativeLV....you people really need some prozac. get your heads out of your grumpy, cheap a$$es and start spending some money and pull us out of this. My husband has been laid off since Oct 2008 he is union which proves to everyone that as long as you pay your dues....they people in the office get paid while they pass out free bread and canned good to men that used to make 40.00 an hour.
I guess people don't understand the simple trickle down theory of this.
1.) Consumers spend money
2.) Money spent on consumer goods is money that grows business income/profit
3.) Profit creates JOBS in retail and other industries that consumers spend money on
4.) More jobs creates more people that are able to become steady consumers (refer to #1 and keep going to #5)
5.) Profit creates expansion which creates....you guessed it MORE JOBS
6.) Expansion ALSO creates more manufacturing jobs as well as CONSTRUCTION jobs as companies with profits and expansions need more space to accomodate
7.) More construction, more jobs and new companies creates...you guessed it MORE JOBS...MORE MONEY
Seriously people do you need this explained...its ok...I understand, you bitter nasty people that refuse to look at ANY growth in a postive way are the idiots that got mortgages three times more than you could afford so your neighbors and buddies would think you were worthy of breathing....too bad that your buddies had to see that big fat red FORECLOSURE sign in your front yards so that you turned into a bitter dried up moron...and sadly your children will too.
Why are people that b*tch and cry for our economy to get better and for our government (no I hate Obama too) to make things better. Well newsflash people the politicians are all morons that could care less about you and care more about those piece of garbage criminals climbing through fences and dropping anchor babies to stay here and btw not only refering to Mexicans because there are millions of illegals here from ALL countries...
So to sum up my rant....stop sitting on your lay a$$ and get out there and go back to being normal, realize that politicians are nothing but jokes that are getting a GREAT paycheck while you are sitting around on craigslist applying to every job on the site...
The faster you embrace ANY type of expansion....the quicker our local economy will be stimulated...its pretty messed up Texas has WAY more illegals than we do yet their economy didn't get hit, it got a little dent, but nothing even near what we got...the difference...they are positive and open their arms to growth....WHO CARES IF 100 COMPANIES A DAY MOVE TO VEGAS.....THATS TAX DOLLARS TO THE STATE.....TO OUR CHILDRENS SCHOOLS....and more jobs...temporary or permenant a job is a job is a job....and while I have not one but TWO degrees and my husband does as well thank God he wasn't only relying on the construction skills I would take 2 jobs and not turn my nose up to them because a job is a job and it pays for food for my child and myself and my husband, and it keeps OUR roof over our head as well as keeping my daughter in designer clothing. I am grateful I am not at that point, but seriously whats more important PRIDE or homelessness and/or staying in a shelter or in your friends and families spare bedroom???
Suck it up and open your minds and wallets stimulate the economy and lets go back to being the UNITED States of America instead of just Americans that haven't been united in a very long time.