Business View Magazine - May 2016 103
not going to offer us the commission levels that make
us an attractive product for the franchisee if we’re not
providing our carriers with strong, solid production and
economies of scale that allow them offer us such high
levels of commission. We have a very strong lineup of
carriers that allows us to provide coverage to pretty
much any customer that might walk in our door.”
Another way in which Fiesta franchisees can prosper
is by owning multiple units. “We are very strong believ-
ers that multi-unit ownership is ultimately the key to
long-term financial success,” Silke states. “Multi-unit
ownership allows the franchisee to lower their royalty
rate by up to five percent when they own three or more
offices. Multi-unit ownership allows the franchisee to
lower their labor costs through the use of labor sharing
between offices, and it also allows the franchisee the
ability to create their own empire by locking up pro-
tected territories next to one another so that they can
be the dominant insurance and tax provider within the
protected geographic territory they purchase.” Today,
about 48 percent of Fiesta franchisees have multiple
units. The largest franchise owner owns 25 units and
there are many other owners with five to eight stores.
Out of 148 locations, the company has 73 individual
franchisees.
In order to keep Fiesta’s brand and image consistent,
all advertising - whether print, radio, or television - has
to be approved by the corporate office. Silke says that
about a year-and-a-half ago, the company instituted
a combined marketing fund for statewide television
advertising on California’s Latino television stations.
“Every store in California puts money into the market-
ing fund on a monthly basis,” he explains. “California
is the one state we can use television for advertising
because we have enough distribution and coverage in
the state. It’s really about branding; we’re really trying
