Question: Enviro Paving Corp. is using the franchise model to successfully grow its business throughout North America. The company, which uses recycled tires to pave driveways,

Enviro Paving Corp. is using the franchise model
Enviro Paving Corp. is using the franchise model to successfully grow its business throughout North America. The company, which uses recycled tires to pave driveways, is enjoying significant growth as people are looking for more environmentally friendly products. Unlike traditional asphalt driveways, Enviro-recycled driveways do not leak toxins into the ground and come with a five-year guarantee. Current franchise owner Ron Bristow tried the product at his home in Innisfail, Alberta, and liked it so much he bought the franchise rights for two territories, including Central Alberta Bristol says, "We can put it over asphalt concrete, paving stone, sidewalk blocks," adding that there's a recycled plastic product that can be used to create the necessary base for the rubber coat elsewhere-such as on bare ground support over 100,000 pounds per square foot." As noted in previous chapters, one advantage of franchising for the franchisors is that they can grow their company quickly, often using other people's money; and franchise owners tend to be very interested and committed managers The downside is franchisors give up a large portion of their potential net income to the franchisee, often settling for an initial franchise fee and a percentage of sales, better known as a royalty. While royalties are in the range of 5 to 15 percent of annual sales, they still fall well short of 100 percent profits

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