PRA Destination Management has brought an old concept-franchising-to a new business: destination management companies. San Diego-based PRA signed its first franchise agreement late last year. Today, the PRA system serves six markets in Southern California with four company operations and two franchises. Gross revenues in 1998 were $21 million, the company reports.
The theory behind franchising DMCs is the same as for hotel and fast food franchises-offering the customer consistent quality systemwide. "Clients like the way we provide service," explains PRA vice president Sandi Cottrell. If clients have been happy with PRA's service in one city, "they will select us in another city," she says.
In return for their franchise fee, PRA franchisees go through a 21-day training program to learn the PRA system. Topics covered include sales training and operations management. "The franchisees must meet our high standards, but they benefit from the 18 years of experience PRA has had in this business," Cottrell says.
Franchisees also join in PRA's marketing program, contributing a percentage of their sales to marketing efforts including trade shows, advertising, telemarketing, account management and a media program.
PRA's franchise fees favor those with some experience in destination management. The initial fee is $10,000 for those who convert an independent DMC to a PRA office. The fee is $20,000 for a start-up PRA program. PRA estimates that the initial investment required ranges from $35,000 to $50,000 for conversions and from $125,000 to $175,000 for start-ups.
PRA sees a wide horizon for growth. "We plan to start franchising in major convention cities in the United States," Cottrell says. But the company expects to go beyond domestic borders: "We've had inquiries from Africa, Finland and the Caribbean," she adds. -L.H.
