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Read the original story at http://www.denverpost.com/business/ci_17101579#ixzz1BQGJjdXw
Many schools will train students about business, but Metropolitan State College of Denver wants to take it a step further and set them up in their own businesses.
Metro’s Center for Innovation plans to launch a “Franchise Ownership Program” this fall that will provide students with training, connect them to franchisers and provide financing.
“This program will make hundreds, if not someday thousands, of people entrepreneurs who would not now think of doing that,” said Mick Jackowski, program director.
The high cost of buying and launching a franchise, about $250,000 on average, limits many entrepreneurs, Jackowski said.
The credit crisis also has made it more difficult for startups to obtain financing.
For $5,000 to $10,000, a potential franchisee can participate in the two-month training program and then be matched up with one of 10 participating franchisers.
After successfully completing the program, students will get the money they need to buy a franchise and fund their startup. They also will receive ongoing support from the center.
Investors will own the business at first, but in year three, franchisees will start repaying the investment with a balloon payment in the 10th year, at which time the franchisees will own the business outright.
Jackowski said the program is trying to raise $1 million for its first fund in coming months, with two funds planned for 2012 and three a year starting in 2013 and on.
BNY Mellon has provided seed funding of $100,000 for the program.
“We aim to have a failure rate of zero, but even with a 20 percent failure rate, we can be successful,” Jackowski said.
He estimates investors will earn returns in the 8 percent to 10 percent range, depending on the success of the underlying businesses.
Metro State spokesman Tim Carroll said the school went with franchises because they offer tested business concepts with a lower risk for entrepreneurs and investors alike.
The franchisers who have signed onto the program are Camp Bow Wow, Cartridge World, DUCTZ, Grease Monkey, Home Buddies, Homewatch CareGivers, Monkey Shine, PostNet, Smiling Moose Deli and 10 til 2.
“It is bringing us some qualified leads, and they are walking in with money,” said Larry Hill, director of development for Smiling Moose Deli in Boulder. “We get people all the time interested in opening a store, but they can’t find money.”
Metro will open the program up to its students, alumni and, depending on demand, the general public.