Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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Franchise Investment Could Be Best Way for Foreign Nationals to Achieve Temporary Residency in the U.S.

by Franchise Chatter on September 14, 2014

in Foreign Investor Visas, Franchise Chatter Guides

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Nandini and Samrat Chatterje

E-2 visa holder Nandini Chatterjee and her family at their Maui Wowi store in Oceanside, California. Back row from left: Sister Aarti Galot and her husband Narendra Galot with daughter Khushi Galot, Samrat Chatterjee and Nandini Chatterjee. Front row from left: Syna Galot and Amaara Chatterjee.

This Franchise Chatter Guide on E-2 and EB-5 visas was written by Brian Bixler. Access to the full article is available to Platinum subscribers.

A few years ago, new parents Nandini and Samrat Chatterjee were interested in starting a life with their baby in another country. Born in England and raised for part of her youth in Kenya, Nandini Chatterjee wanted to move to another country to become an entrepreneur. She also wanted some security of residency for her family in the country she would move to from London to start a business.

Affordability and location became major determining factors in the Chatterjees’ decision. She and her husband looked at countries such as Australia and Canada, but the amount of investment necessary in those countries deterred the couple from emigrating to them. It was then that they began to explore a visa program in the United States that many foreign investors have found convenient for moving to America and establishing a business, especially if it’s a franchise.

“So long as everything is in place, it’s quite straight-forward,” Chatterjee said of the E-2 application process. “We had a very good immigration lawyer guide us through the process.”

The E-2 visa is a renewable visa that allows entrepreneurs to live in the United States as temporary residents as long as the business they begin or invest in requires a “substantial investment” and creates jobs for American workers and not just employment for the investor and his or her immediate family. Spouses of E-2 nonimmigrants are also authorized to engage in employment upon receiving an employment authorization document (EAD) from U.S. Citizenship and Immigration Services.

According to an article published earlier this year in the Wall Street Journal, the program has become an option for some foreign investors who might not have the extra cash and time to invest in getting an EB-5 visa, which requires a greater outlay of capital and can result in a lengthy waiting period for approval. The federal program, launched in 1990, gives foreign nationals the chance to obtain permanent residency by investing a minimum of $500,000 in a U.S. business. The business must create at least 10 new jobs within two years.

“Some foreign franchise buyers are vying for a temporary E-2 visa, which tends to have faster processing times and a lower upfront investment of roughly $100,000 in a U.S. venture,” the WSJ reported.

Visa Differences

Nandini Chatterjee

Nandini Chatterjee, Maui Wowi Franchisee

Knowing the difference between the EB-5 and E-2 visas is important. For starters, the EB-5 visa is intended to give the applicant an eventual green card or permanent residency status in the United States. Meanwhile, the E-2 visa must be renewed often and is not intended to be used as a vehicle for permanent residency; however, its perpetual renewal could effectively make it a “permanent visa.”

The EB-5 can be used for passive investment, while the E-2 visa requires the applicant to be actively involved in the business by demonstrating ownership of at least 50 percent of the enterprise, or by possessing operational control through a managerial position or other corporate devices.

According to USCIS, an E-2 investment involves the investor placing capital, including funds and other assets, at risk in the commercial sense with the objective of generating a profit. The investment may be for the purpose of establishing a new business venture or purchasing an existing business. The E-2 nonimmigrant classification is applicable only for nationals of a treaty country, which is one with which the United States maintains a treaty of commerce and navigation.

If it sounds a little complicated, one might take Chatterjee’s advice for other foreign investors looking to achieve temporary residence in the United States: hire a good immigration lawyer.

“We looked at various different options but nothing seemed to be exciting,” she said. “We just got to the point where we really weren’t happy with the choices we had in our budget.”

Chatterjee, 39, began researching various businesses, and the countries where they were based, in 2010. Once she learned about the E-2 visa, she met with an American lawyer and began looking at franchise operations in the United States that required significantly less than the $500,000 to $1 million investment the EB-5 visa required.

After looking at two franchisors, including Doc Popcorn, the couple zeroed in on Maui Wowi as a franchise with great investment potential. They signed an agreement with the franchisor in the latter months of 2011. They simultaneously laid the groundwork for an E-2 visa and began searching for the optimal location with help from the franchise company and their attorney.

After considering opening a Maui Wowi franchise in New York, Las Vegas and Miami, Chatterjee and her husband ultimately chose a location in California and moved to the United States in March 2014. They opened their Maui Wowi store in August and employ three American workers in addition to working at the store themselves.

Recruitment Tool

Mike Weinberger, CEO of Maui Wowi

Mike Weinberger, CEO of Maui Wowi

The Maui Wowi brand is centered around its Hawaiian Fresh Fruit Smoothies made from all-natural probiotic yogurt. Based in Greenwood, Colo., the chain has about 450 global locations serving coffee, snacks and other beverages. The brand differentiates itself by also bringing Hawaiian coffees to the mainland. It has developed an exclusive line of Kona espresso, cappuccino drinks, and blended gourmet coffees from Maui, Kona, Kauai and Molokai.

According to Entrepreneur.com, the number of Maui Wowi units has fallen at times during the last five years. This has led to a decrease in market share; IBISWorld market research firm estimates Maui Wowi’s market share of the smoothie industry to be about 3.8 percent.

Maui Wowi Chief Executive Officer Mike Weinberger said that while the actual number of foreign franchisees who take advantage of the company’s E-2 visa program is small, he still considers the program to be an important recruitment tool for new investors.

“It makes sense to look at the vehicle as part of the program for qualifying prospects,” Weinberger said in an interview with Franchise Chatter. “In the last year, we’ve done marketing on an international basis through the press, SEO (search engine optimization) and web page stuff.”

The E-2 visa also became a selling point for the company when Maui Wowi attended trade shows in Egypt and Mexico to lure new investors.

Franchises Are Ideal Investments

Joe Fedorchuk, Prinicipal Broker with Fran5

Joe Fedorchuk, Prinicipal Broker with FRAN5 Franchise Brokerage

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