Key Idea #1: Giving ownership as a recruiting technique wasn't invented by the dot com companies.
In 1961 Angelo recruited his first partner. He really didn't think of this man as a franchise owner, he thought of him as the manpower needed to expand.

You think back: What did Angelo do to recruit people into his business?

Answer: He bought land, put up a building, installed all the equipment needed to make Del's lemonade then gave the location to the person who was willing to play by his rules.

You think back What were the rules?

Answer: Pay Angelo $1 per bottle, on consignment, for the Del's ingredients and put two mobile units on the road.

What do you think? Why is this a great way to expand?

Answer: You already have the product and the processes in place and this gives you the third necessary piece for success: people. The franchisee is motivated to work because he gets to keep the profits. In the beginning, a person didn't even have to pay Angelo a franchise fee. Angel fronted all the cost of the new locations. Today that has changed. But, Angelo could recruit people who were willing to work hard and they didn't even have to have cash or go through the process of getting a loan to get started in the business.

To study three other companies who have grown through franchising, go to FASTSIGNS, Auntie Anne's Pretzels and Grow Biz. Watch the videos, read the transcripts and go through the study guides.

What do you think? Why do people want a "piece of the action" in order to join your team?

Possible Answer: Many new companies have done successful initial public offerings and when that happens, whoever is holding stock can win big. A paycheck for many people now is unappealing. It is too cut and dried. To recruit the talent you want, be creative. Do a DPO (direct public offering) and give stock to employees, or license your product to others, or sell franchises. These are all good ways to attract and keep good people. Go back and study Bill Hagstrom of UroCor. He recruited the best of breed to bring his company from 12 to 250 employees in just under two years. To get the top people, he offered stock in the company.

Key Idea #2 Standardizing paves the way for franchising.
Angelo learned how to make his icy lemon treat from his grandfather. Many of us have access to old family recipes but most of us don't turn them into multimillion dollar businesses.

You think back: What really got Angelo on the road to selling franchises?

Answer: His personal frustration with the inconsistency of his own product. He said he couldn't stand for it to vary in flavor so he worked to develop a recipe that he could depend upon. Today every serving of Del's Lemonade tastes the same. You can buy one from his original location in Cranston or at one of his new locations in Aruba. They will taste the same.

What do you think? Why don't more companies use the franchise method?

Possible answers: Very small companies stay small for a reason and one big reason is the owner doesn't want to standardize his or her product or service. Or, the owner doesn't think it is possible. Angelo could, after fifty years, just have the one stand and continue to make the beverage the exact way his father did. But, Angelo wanted to expand. That's another necessary ingredient for growth, want to. You have to want to grow. You have to want to take on the managment of more people and often that means more debt.

You think back: What person on the Del's team is critical to the quality control of the product?

Answer: Dimitri Kazantzis, the food scientist. In the food business there are many rules and regulations and Dr. Kazantzis makes sure everything they do meets all the legal requirements. Also, Dimitri is working to put the Del's formula into powdered form which will save thousands of dollars in shipping costs.

Key Idea #3 An Internet presense even sells lemonade.
In 1995 Del's paid an outside firm $10,000 to put up a web site.

You think back: Can you really sell lemonade from the Internet? Won't the ice melt on the way to the customer?

Answer: They are not selling lemonade, they are selling franchises. With very good story-telling on the site and a simple form for people to complete and email into Bruce DeLucia, they are getting inquiries from around the world.

You think back: Why does it make sense for Del's to grow out of Rhode Island?

Answer: Because it is cold there half of the year. People don't want Del's in December in New England. Del's should have operators in all the hot spots of the world.

Key Idea #4 Do one thing really well.
Angelo's wife was wise when she asked him to either run the bowling alley or the lemonade stand, but not both.

What do you think? Why didn't Angelo just hire someone to run one of his businesses for him?

Answer: Because that's easier said than done. And, the debt his father had gotten him into over the location of the bowling alley probably meant he had no cash flow to hire a manager. Usually tiny new businesses can't afford any employees other than the founder.

By getting rid of the bowling alley, Angelo had time to make Del's a success.

Andy Murstein's grandfather at Medallion Funding told him there are riches in niches. This is why Medallion has stuck to what it knows for nearly 70 years. Andy Wilson of Boston Duck Tours has had offers to expand to other cities but he says he wants to stay focused on his 50 employees in the one location. Don't be distracted by ideas that could pull you away from a complete focus on your core product or service.

Key Idea #5 Good ideas are often stumbled upon.

When Angelo came home from serving in the military in World War II, the government sent him to school.

You think back: Did he study business?

Possible Answers: No. His father opened the bowling alley, didn't like dealing with the employees and left Angelo to make a go of the business.

You think back: What was the big downside to the bowling alley?

Possible answers: The building did not have air conditioning and would get so hot in the summer that customers stayed away. That's how Angelo got the idea to make and sell his grandfather's lemonade recipe. When his wife told him to choose between the two businesses, he chose lemonade. The was good profit and it seemed to him that everyone who tried Del's came back for more.

Customers will tell you what they want. We studied Joe T. Garcia's Mexican Restaurant and learned that all the growth of the business over the years has happened by stumbling on to an idea. The bakery, the catering, the outdoor dining and the bottled salsa all happened without much planning or struggling.

Key Idea #6: Successful ownership relys on good health and fortitude.
Starting and growing a business takes physical stamina. And, it is never a sprint, it is always a marathon.

What do you think? When I asked Angelo what it takes to be a business owner, he said good health and fortitude. Why would he say this considering the complexities involved in starting and growing a business? It sounds a just a bit too simple.

Answer: He has been making Del's for 50 years. Once he got the product and processes perfected, what was left to do was "just do it" as the NIKE people say. To stick to something for 50 years, asuming it is a good idea, you have to feel like doing it and you have to face many problems. Did you know that fortitude means, "courage in bearing pain or trouble?"

Some stuggle most with the product, some with the processes and some with the people. Angelo put a system in place that makes him profits. He's happy. But, he still has to get up everyday and work his system.

"Learn today, earn tomorrow, return forever" - our corporate maxim.