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Scott Bigelow | 910.521.6351 | scott.bigelow@uncp.edu
University Communications and Marketing

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Monday, October 31, 2005

Vance Houston offers primer for successful franchising

Entrepreneurship comes in many forms. For 1964 UNC Pembroke graduate Vance Houston, business success came in franchising.

Vance HoustonThe Rock Hill, S.C., businessman shared his business story with more than 100 students and faculty October 19 in a lecture at UNCP’s Regional Center for Economic, Community and Professional Development.

Nineteen years ago with no money and no job, Houston proceeded to build a small business empire that includes 11 Subway restaurant franchises.

“I got in on the ground floor of Subway franchising when there were only about 1,000 stores,” he said. “We decided to buy two franchises, and both my children dropped out of college to work with me.”

With 40 years of success stories behind it, Subway has more than 22,000 stores. But, the key to working for yourself is work, Houston told a very attentive audience.

“For five years, I worked 16 hours a day, seven days a week,” he said. “If you don’t like to work, then you won’t own your own business, at least for very long.”

Houston, 69, said he still enjoys working for himself, but his son runs the day-to-day operations of Houston Enterprises, and he invests in commercial real estate.

Houston discussed franchising from A-to-Z, including start-up financing.

“My parents wouldn’t even lend me money,” he said. “I had a business plan under my arm, and every bank turned me down.”

A “bad situation” improved when Houston’s friends and family loaned him funds for his first two franchises, which cost $150,000 each in 1985. He advised students that banks and the Small Business Administration will work well with established franchises.

Houston offered advice on all aspects of franchising:

  • On entrepreneurship – “The greatest thing that this country has to offer, and I didn’t even know it.”
  • On being your own boss – “I get kind of emotional about it. The benefits are wonderful. You worry a lot, but when it’s done, you’re the one who did it.”
  • Research – “The Franchise Times is the franchising bible. It should be available at the School of Business.”
  • Education – Through your training here in the University’s entrepreneurship programs, you will be in better shape than I was.”
  • Working for somebody else – “You’ll become comfortable like I did. You’ll get in debt, and you’ll lose the desire.”
  • Saving – “Don’t spend all your money on BMWs. You won’t be in business long.”
  • Debt – “I don’t owe anybody a nickel today.”
  • Family business – “Sometimes it does not work. I don’t care who they are, you have to replace them if they can’t cut it.”
  • Community service – “We give away a lot of food, but you’ve got to support your community. It comes back to you because they come back.”
  • Labor – “Labor is an issue. We’re getting more into real estate because it doesn’t take any labor.”
  • Franchise flexibility – “There is zero flexibility in the menu. An (Subway) inspector comes to town every month.”
  • Royalties – “We pay 8 percent off the top and 4.5 percent for marketing.”
  • Marketing – “Subway has a car on the NASCAR circuit, and we are a Superbowl sponsor. We bellyache about (the cost), but it’s worth it.”
  • Creativity – “That’s the good thing about franchising. I realized I wasn’t a very creative person.”
  • Subway sandwiches – “They’re good aren’t they? We have five kinds of bread, and we bake it every day. There’s nobody close. They try.”
  • Failures – “I had one store that was in a convenience store go out of business. It happens. I moved that store and tripled our sales.”
  • On business – “My business is simple. We didn’t go to into business to make sandwiches. We went into business to pay other people to make them.”
  • On his first day in business – “We didn’t have enough seats.”
  • His future – “We’re not going to grow as rapidly as we did. There are not going to be many franchises available. We’ll pick and choose. We are getting into commercial real estate. We usually end up buying the strip shopping centers where our restaurants are located.”

Vance Houston worked his way through college at UNCP.

“I lived in Chadbourn, and they let me pay weekly,” he said. “I worked all weekend and paid them something like $25 on Monday.”

After a successful career in textiles, he was fired.

“One day, they called me in and said they didn’t need me. I went home, and we cried a lot,” he said. “Eventually, I came to the realization that textile industry was dead.”

Houston gives several lectures a year on entrepreneurship and franchising. His appearance at UNCP was sponsored by UNCP’s School of Business, the MBA program and the Regional Center.

For more information about business programs, please call 910.521.6214 or email business@uncp.edu. For more information about the MBA program, please call 910.522.5712 or email mba@uncp.edu.

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