Eyes On The Prize Winning is just the beginning for Crown Trophy.
Opinions expressed by Entrepreneur contributors are their own.
The Mohawks were dismal. We knew our town had never witnessed aworse little league hockey team. We tried, but our pathetic skatingnonetheless produced a spotless record (no wins), and thus the teambanquet was peppered with despair. Fortunately, our coach was anexperienced loser and saved the season when he surprised us all byproducing a few boxes of gleaming trophies from under the table.Until that point, we felt like failures, but as each of us receivedour trophies with such inscriptions as "Most Improved,""Hustle Award" and "Team Leader," each boyfound redemption. Now that had a value that far exceeded the costof a plastic trophy.
Crown Trophy Inc., a franchisor based in Yonkers, New York, hascapitalized on people's need to be recognized since 1985, whenit began franchising Crown Trophy stores. The company was also thetop-ranked Sports Memorabilia/Recognition Products franchise inEntrepreneur's 1998 Franchise 500®. Besides trophies ofall kinds, Crown Trophy stores offer engraving, signs, plaques,medals and desk accessories. The chain now has 54 stores inoperation, and according to Crown management, there hasn't beena franchise failure, license cancellation or franchisee lawsuit inthe chain's history.
That's pretty remarkable for a 13-year-old franchise, and itappears to be due to the company's attitude toward itsfranchisees. For example, according to Charles Weisenfeld, co-ownerof this privately held company, the franchisor isn't interestedin making a profit from the sale of supplies to franchisees.Rather, the company is content to see to it that its franchiseesmaintain the lowest prices in the business. In fact, selling"deep and cheap" ($4 to $6 per unit) is a primary companystrategy that permits various organizations to afford participationawards, like those presented to my fellow Mohawks.
On the plus side for operators, stores close by 6 p.m. eachevening and are closed on Sundays. On the other hand, very littlebusiness walks through the door unsolicited. Instead, franchiseesspend a great deal of time smiling and dialing to timesolicitations with the beginning and end of each local sportsseason.
Crown has a minimum monthly royalty payment that steadilyincreases over the first six years of the 10-year license. Duringthis time, your royalty remains at 5 percent of gross sales if yourannual sales are less than $500,000; during the first year,however, you must pay the greater of 5 percent of gross sales or$3,750. During your second year of operation, the minimum is raisedto $7,500, and in year three, it's $10,500. Accordingly, astore paying a 5 percent royalty of $3,750 would have first-yearsales of $75,000. If you paid $10,500 in royalties, yourcorresponding annual sales would be $210,000. This method ofextrapolation is crude, but it should give you an idea of yourminimum sales expectations while also reinforcing the fact thatyou'll need to have money tucked away to cover your personalexpenses during the start-up period.
The initial investment, according to Crown's UniformFranchise Offering Circular, ranges from $100,885 to $118,885. Thebulk of this cost ($70,000 to $74,000) is paid to the franchisorfor a start-up package that includes equipment, inventory andsupplies.
To a team like the Mohawks--or any other worthyorganization--companies like Crown Trophy are real winners.
Todd Maddocks is a franchise attorney and small-businessconsultant. You can reach him at TMaddocks@aol.com
Crown Trophy Inc., (800) 583-8228, scott@crowntrophy.com
