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Press Release

Metro State Center for Innovation Announces First-of-its-Kind Franchise Ownership Program


Contact: Tim Carroll, Office 303-556-5136, Cell 303-870-7705

Posted: January 14, 2011



(Denver, Colo.) — On Jan. 14, 2011, the Center for Innovation at Metropolitan State College of Denver announces a first-of-its-kind franchise ownership program, further solidifying Denver nationally as a key test market for small business development. This unique program, supported by its first seed gift of $100,000 from global financial services company BNY Mellon, establishes a formula that will benefit investors, franchisees, franchisors and the College.

The concept has already gained national recognition from the U.S. Association of Small Business and Entrepreneurship at the association’s annual conference in Hilton Head Island, S.C. with an award for Best Practitioner Paper for innovative fundraising.

Program franchisee participants benefit by obtaining seed capital and two months of intense start-up training for a small initial investment of $5,000 to $10,000. As the franchise continues, the participant will gain equity by generating revenue and making payments, allowing for full ownership of the business they manage after 10 years.

“A few colleges have classes directed at franchise management, but none provide the investment for students to purchase a franchise as well,” says Mick Jackowski, Center for Innovation director. “The Center for Innovation recognizes that successful franchises require ongoing training and support beyond the start-up phase, and ongoing training is a key component to this unique formula.”

Program investors will benefit through the opportunity to contribute to a business development cause that not only creates jobs and economic growth, but also produces a projected net return of 10 percent. Franchisors receive a dedicated stream of new talent to open new locations, establishing a team of fully trained franchisees with a support infrastructure in place.

For the first phase, the franchise program will raise approximately $1 million to establish an initial funding pool, supporting between four and eight future owners. The funding will come from a variety of sources including grants and investors’ contributions.

“We are delighted to support the College and the Center for Innovation’s effort to create jobs and strengthen the economy in Denver and throughout Colorado,” says Jon Stuck, Rocky Mountain regional president for BNY Mellon’s wealth management group. “We hope that these types of collaboration become the standard across our country.”

The Center for Innovation hopes to raise enough funding to support three franchise classes per year, with 12 – 24 new business owners, depending on the capital cost of each franchise.

“From our preliminary research, we anticipate the application process to be highly competitive because in today’s market there aren’t as many options for securing funding,” adds Jackowski. “Our program will match interested entrepreneurs with groups of investors willing to offer start-up capital for new locations, supporting the franchisees during their first 10 years of operation.”

Some of the initial franchise companies students can choose from may include: Camp Bow Wow, Cartridge World, DUCTZ, Grease Monkey, Home Buddies, Homewatch CareGivers, Monkey Shine, PostNet, Smiling Moose Deli and 10 til 2. Although all franchise types will be considered, there is a conscious effort to focus more aggressively in supporting home-based franchises, due the lower capital costs needed to get them up and running.

Upon completion of the initial training phase of the ownership program, franchisees-in-training purchase equity in the franchise interest free at a rate of 10 percent annually starting in year three and continuing annually through year nine. In year 10, the franchisee will pay off the remainder of the equity, or 30 percent, and will assume 100 percent ownership of the franchise.

Additionally, in each year, the franchisee pays a royalty of 7 percent of the franchise revenue to the investors, and 1 percent to the Center for Innovation. The more revenue each franchise generates, the greater the investors’ return.

DISCLAIMER:  The information contained in this document and any accompanying presentation or collateral does not constitute an offer to sell securities or a solicitation of an offer to buy securities within the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act. Moreover, none of the information contained in this document and supporting collateral is a recommendation for investment in any securities. Rather, this document is for purposes of information only.

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About Center for Innovation
The Center for Innovation at Metropolitan State College of Denver was established to offer a minor degree in entrepreneurship or a certificate in entrepreneurship that goes beyond mainstream business curriculum. The center supports all types of industry disciplines with nearly 40 different majors represented in the program. Coursework is taught by Metro State affiliate facility, providing real-world experience from relationships with businesses and organizations. The center offers $2,500 micro-loans and coaching for students and community members working to grow small businesses. For more information visit www.MetroStateInnovate.org/

About Metropolitan State College of Denver
With more than 24,000 students, Metro State is Colorado’s leader in educating undergraduate Coloradans. Starting in the fall of 2010, the College is offering master’s degrees in accounting and teacher education, will offer a master’s in social work starting fall 2011. The College enrolls the highest number of students of color among four-year colleges in the state. It boasts 67,500 alumni, the bulk of whom remain in Colorado after graduation.