New Stock Pick: PG
Wow. Just caught part of a documentary on CNBC about franchising. One of the big segments was that Proctor & Gamble has started franchising. They are selling franchises for “Tide” Dry Cleaners and “Mr. Clean” Car Washes. Holy cow! What a fantastic idea. Next thing you know, they’ll have “Crest Dental Centers” and “Gillette Shaves & Haircuts” and “Braun Coffee & Toast Houses” and “Olay Health Spas.”
We realize we are very early on this one, but we predict huge gains from their higher than average franchise fees. Just think, they are going to have people pay them money to open retail outlets across the country that promote their products! It’s free on-the-street advertising to the 10th degree.
Read this article. Some of the vignettes show how powerful a marketing idea this is. Existing dry cleaners reporting a 50% decline in business once a Tide Cleaners opens nearby, etc. Tide Dry Cleaners Franchises in the New York Times.
What a great growth channel for a company that pays a 3 1/2% dividend already. I’m in.