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On Oct. 21, Wireless Zone, a Connecticut-based franchise organization that is the largest indirect channel for Verizon Wireless services and products, planted its flag for the first time in the state of Iowa by converting All Cellular in Grinnell to a Wireless Zone outlet. And it’s not about to stop there.

Kevin Downs, Wireless Zone’s vice president of franchise development, said the company is looking for new franchise owners as well as owners of existing wireless stores to saturate the Des Moines area with about 15 locations in the next three years.

“Des Moines is an area that just fits within our expansion plans,” Downs said. “The Midwest has been a tremendous area of growth for us this last two years. Where we ultimately look is places that are underserved, and the Des Moines area is an area that needs additional Verizon Wireless distribution.”

Wireless Zone, which has 367 stores in the country, was ranked the No. 1 franchise in its category by Entrepreneur magazine and is expanding rapidly across the country away from its base in the Northeast. The company added 39 units in 2007 and 60 units in 2008, and it has sold 91 units through September and projects it will go over the 100 mark by the end of the year.

“This is going to be a big year for us,” said Sean Fitzgerald, Wireless Zone vice president of franchise development. “We provide an option for entrepreneurs looking to venture into independent ownership.”

Downs said most Wireless Zones, which generally have showrooms containing between 1,200 and 1,500 square feet, will be located in strip centers, with others in malls and a few operating as stand-alone stores.

For David and Heidi Welch, owners of a recently converted store in Grinnell, the decision to become a Wireless Zone franchisee was a no-brainer. Their store had previously sold Alltel Corp. products and services before Verizon Wireless bought Alltel in January 2009. David said he was looking to add some of the benefits of joining with a large franchiser like Wireless Zone.

“Being a large company, they have a lot of purchasing power, and with that purchasing power, how that benefits us is it gives us better pricing on phones, which allows us to pass that savings along to the customers,” he said. “It also allows us to have the newest phones in our store from day one.”

Welch, who owned multiple stores before the one in Grinnell, said another reason he and his wife made the conversion was that they had all the systems – human resources and public relations – which allowed them to spend more time focusing their attention on the customers and on the day-to-day rigors of owning a small business. Since the transition, Welch said, he has seen sales at the store increase.

Downs said the typical build-out cost for a store is approximately $63,000, which he said was relatively low compared with restaurants, for example. The low cost of entry is one of the reasons he thinks Wireless Zone has been expanding so rapidly in spite of the struggling economy.

In fact, Downs said that when the economy is tough, franchising typically skyrockets because laid-off workers try to find ways to continue making nearly as much money as they had been making. But with credit tight during this recession and banks lending less money to small business owners, Wireless Zone has become an attractive option for potential franchisees because of its low cost of entry.

What’s also fueling Wireless Zone’s growth, Downs said, is that the cell phone business was a different business 10 years ago. Because there wasn’t a lot of distribution, most customers weren’t current owners and had to be educated about the need for a cell phone.

“Now there is a lot of distribution, and it is really more of a retail store, so there are a lot of people that have been in the business for a long time, that sort of need the collective best practices,” Downs said. “It is hard for them to be on their own now. So they are looking at growing or joining a larger organization.”

Downs said Wireless Zone’s growth in the Des Moines area will be determined by the number of candidates who want to either convert an existing store or open a new outlet. Despite not having a lot of competition, Downs said 15 stores is about what the area can handle.

“Without sounding cocky, when we go in an area, there is really not that much competition,” Downs said.

Welch can see the potential for Wireless Zone to expand in Iowa.

“At the end of the day, as a small business owner, it is just so much that you take on, that when you are able to bring an experienced team like Wireless Zone, someone that has been doing this for years, to come on to your team, it is still just such a benefit,” Welch said. “I could definitely see how it could benefit other wireless business owners to convert.”