Bank on the kids

Rolando Bichara has seen plenty of businesses succeed and fail during his career as a lender.

The veteran banker most recently was chairman, president and CEO of Premier American Bank in Miami. When he retired to Naples after 41 years in banking, he decided to help his two sons become entrepreneurs by buying two franchised locations of Hand & Stone, part of a chain of 125 massage and facial spas.

When he thinks they're ready, Rolando Bichara will transfer the ownership of the Hand & Stone shops in Naples and Estero to his two sons, Andre, 30, and Daniel, 28.

“A lot of businesses fail because of the lack of working capital,” says the elder Bichara. Using his own savings, Bichara acquired the Hand & Stone franchises and is building them out for an undisclosed sum.

After four decades in banking, Rolando Bichara knows the peril of loans that sink otherwise good business plans. “We haven't used any leverage,” he says.

Bichara set up the Naples store as a limited-liability company and the Estero store as a C-corporation whose shareholder is his individual retirement account. He declines to say how much he invested in the franchises, but Hand & Stone says the cost of opening a store starts at about $300,000.

Bichara says he hasn't decided whether to give or sell the stores to his sons, though he plans to discuss this with his estate-planning attorney and accountant when he feels they're ready to take over the business. “When the time comes, we'll analyze it,” he says.

For now, he's advising his sons on how to run a business. The banker in him still echoes: “You have to identify risk and mitigate against it,” he says.

Businesses need to have enough working capital so they have enough to get past the point of profitability. “The first five years are the riskiest,” Bichara says. Hand & Stone says a store needs $40,000 in working capital.

The elder Bichara says he's anxious to return into retirement and delegate to his sons. He's not keen on micromanaging the businesses for them. “I'm ready to let go now,” he says, noting he has plans to travel with his spouse.

The Bicharas started investigating a franchise business last spring. Andre, who has an M.B.A. from Florida International University and already started a small-business lending firm with his father, joined the venture first. Daniel, who has degrees in physics and astronomy, joined them in the fall.

Father and sons say they get along well enough to do business together. “It brings us closer together,” says Daniel Bichara. What's the secret to running a successful family business? “Number one is communication,” says Rolando Bichara.

When they were investigating a prospective business to buy, they knew they wanted to get into the health care field because of its resilience during the recession. “During the downturn the industry has done well,” says Rolando Bichara.

They looked for a franchise that could provide help with finding real estate, selecting sites, marketing and public relations. “That support was key to me,” Bichara says.

What's more, the massage business isn't heavily regulated like other health care businesses and a growing number of baby boomers are seeking ways to alleviate the aches and pains of aging. The reasonable cost of a massage at Hand & Stone— less than $50 — compares favorably to more expensive resort spas and a membership structure should help the business through the traditionally slow summer months.

The Naples store has 14 massage rooms and could generate $1.1 million annually and be profitable within a year, Bichara says. “They will ultimately be owners in a short period of time,” he notes of his sons.