Women Entrepreneur.com - 08/02/2009

Financial expert starts a Franchise Business that makes the process of divorce both civilized and fair.

Karen Stewart started her Fairway Divorce franchise in 2006, and it's seen amazing growth in the short time since.

That's because Stewart did the research, tested her concept and made necessary adjustments before she put out the Fairway Divorce shingle.
Stewart, a financial counselor, says she started thinking about a different way to approach divorce in the late 1990s, as she watched clients suffer its often-devastating financial implications.

It became a personal crusade in 2000, when the financially savvy Stewart went through a divorce herself. "Over the course of five years, I spent $500,000 on legal bills," she says. In 2004, she commissioned a market research study to find out whether others felt the way she did about the adversarial divorce system.

The answer was yes. So Stewart decided to write a book, Clean Break: How to Divorce with Dignity and Move On with Your Life. In her book, Stewart laid the groundwork for an alternative to the win-lose system of divorce. That system ultimately became the Fairway Process, a fixed fee, step-by-step, independently negotiated resolution process.

"A couple can move through my entire process separately and bring resolution and get to a win-win," Stewart says, noting that the traditional system of divorce wrongly tries to deal with money and children at the same time. "That creates a tug of war from day one," she says. Stewart's process deals first with the financial realities. "Once you get money issues out of the way, 95 percent of couples--even adversarial couples who are fighting--can negotiate a really great co-parenting plan for the kids," she says.

Stewart made sure she had the training and experience she needed before she started Fairway Divorce. She became a certified divorce financial analyst and earned a designation as a financial mediator. "Over the course of a couple of years I got myself involved in every kind of scenario," she says. She worked on collaborative teams as a financial expert and also guided couples through traditional mediation.

Stewart also took the time to verify the efficacy of her new system. "I was fortunate enough that I had my financial firm," she says. She created a subsidiary and experimented with processes and methodologies for two years, working with 80 to 100 couples during that time.

She didn't make a lot of money, but she proved that her system worked. The final step before opening her doors was verifying that she could, in essence, duplicate herself. So she hired a CPA who came from a big accounting firm and proceeded to teach him the Fairway Process.
That's when she knew she was ready.

The Franchise Route 
"From day one, I made the decision that I was going to start this company, build this company and try and grow as big as I could as fast as I could--but not so fast that I imploded." The firm began in Canada, where Stewart lives, but her first U.S. franchise has just opened in Sacramento, Calif.
To realize her dream, Stewart raised $2 million from investors, with expectations of profitability by 2010, the fourth year of the business. "My strategy was to try to put a franchise together that operated like it was five to 10 years old, so I could sell a whole bunch." The franchise model has already proved its profitability. "The corporation probably will be profitable in 2010," she says.

"We've grown very quickly partly because consumers know they're looking for this," Stewart says. "So when you spend money on advertising, it resonates." Billboards and radio spots work phenomenally well for Fairway Divorce, she says. Then there are referrals--from psychologists, attorneys and anyone in the helping professions.

Stewart says she didn't immediately settle on franchising as the way to grow her company. But she knew she didn't want to grow organically because it would take too long. "I wrote that off early on," she says. "I decided if I'm going to do this, I want to be a player and really make a difference by getting bigger, faster."
She considered finding partners in different cities and growing the way a national law firm might grow. "But when I did the financial analysis, it required a significant amount of capital. I just didn't think it was the way I wanted to go." Then she started to research the franchise arena.

She contacted Cameron Herold, who helped 1-800-Got-Junk become a global giant. "I had heard through an organization I belonged to that he was moving on from 1-800-Got-Junk. I called him and told him about what I was doing." He flew out and worked for a year with Stewart, who says, "I spent a lot of money trying to do this right."

Franchisees have to have an appropriate background, such as being a lawyer, mediator or CPA. "We have a two- to three-week very intensive training program that we put on once people become franchisees, but that's focused on our model and our process," Stewart says. "That needs to be layered on top of years of expertise."

Beyond that, what Stewart looks for in a franchisee is the desire to make a difference. "That's a really important thing for me," she says. "We're pioneers in new territory. You have to have a sense of spirit and passion about this topic." Asked for her advice to would-be entrepreneurs, Stewart offered a variety of insightful observations. The first two are only slightly tongue-in-cheek.

1. Clear your calendar for the next five years. 

2. Redefine what balance means, because you're not going to have any. 

3. Know where you're going. But be less concerned about sticking to your plan and more concerned about having an absolutely clear vision of where you're going. Says Stewart of her own business, "My vision since day one has been exactly the same. How I'm getting there changes probably by the hour." 

She adds, "You've got to live in future space when you're an entrepreneur, so you can let go of the mistakes you're making along the way. You have to correct and fine tune, but you have to be committed to where you're going in the end." 

And, Stewart says, "You have to protect your optimism." 

4. Check your ego at the door. Fairway Divorce is Stewart's seventh business. But because she's pioneering an industry that has never been perceived as a business before, "I have to check my ego at the door every single day. It's hard work. It's eating humble pie every day. You have to be prudent and confident enough to make the changes that need to be made." 

5. Provide checks and balances. "I think one of the challenges when you start a new business--especially if you're committed to growing the business--you have to wear a zillion hats." Give people on your team a significant amount of autonomy, but make sure you have checks and balances in place, she advises. "You can be so busy planting seeds and watering the garden you're working on, you don't realize the person you gave an assignment to is heading in a direction you changed a month ago." 

6. Don't be pig-headed. "Learn very carefully what your unique ability is and surround yourself with people who are good at the other things or better than you at them. Don't think you know everything." That's especially true in tough times--when, she says, you need to surround yourself with people who are smart and might be able to see the solution you're missing.

There are rewards for the hard work, Stewart acknowledges.

First, she says, is the feedback she gets from people who've read her book and have used the process. "That's what it's all about. It isn't about money for me. It's about making a difference.

"My other gift is my children. Because I follow my passion and because I have chosen to not live vicariously through them, I have three amazing children. I think at the end of the day, they get to see that you can be whatever you want to be in life.

"You can have it all," Stewart says. "You have to know what you want and be focused on those things. I work probably 100 hours a week, and I'm a single mom with three kids, ages 14, 13 and 8. My kids are fabulous. I have no mommy guilt. I spend tons of time with them." She also manages to find time to work out daily, before she gets the kids up.

"I hope someday I'm an inspiration for women who struggle with the question, can I be a great mom and can I be successful and can I be fit and have a real strong spiritual sense? I'm walking proof that you can go from sitting in the corner feeling like you don't want to live another day to having all that. It requires sacrifices. But the sacrifices are worth it."

Franchising the Right Way 

Stewart's tips for potential franchisors:

1. Align yourself with somebody who's done it before. "I had to spend a lot of money on Cameron, but he probably saved me two or three years of mistakes," she says
2. Don't undercapitalize
3. Make sure your model works