When someone mentions the word “franchise” certain images usually come to mind, usually involving restaurants or hospitality-related businesses. From the ubiquitous Golden Arches to a local chain of pizza parlors, their corporate charter leads visitors to expect a certain level of consistency. Customers expect to receive similar products or services from companies operating under a franchise — regardless of the location or the owner.
That consistency is a key benefit for customers, while investors typically gain access to benefits such as brand recognition, an established business model and a multitude of support options. Several franchises are actively involved in the B2B tech community and CompTIA, including CMIT, Computer Trouble Shooters and Team Logic IT. That list continues to grow with new local and regional charters sprouting up around the world.
The question asked frequently by prospective or even some existing service providers is whether the franchise model makes sense for them. Those with inside experienced suggest it takes the right entrepreneur with the right mindset to be successful. Franchise prospects have to understand be able to conform to a prescribed list of expectations and commitments. They will likely be asked to adhere to certain corporate standards to ensure consistency in the end user experience and related branding. In most cases, customization is allowed and even encouraged, but consent may be required before making some changes. Owners who understand the need for those stipulations are more likely to prosper under the model.
As with anything in business, the benefits have to outweigh any perceived limitations. Through years of conversations with current and prospective franchisees, as well as franchisor executives, I assembled a list of key reasons the model makes sense to many providers, including:
“The Recipe.” A vast majority of VARs and MSPs willingly admit that acquiring and honing their business skills is their biggest challenge. Their IT proficiency and a desire not to work for others is often their entrepreneurial motivation, but putting the organizational framework together is a daunting task. Few businesses can scale without these effective policies and processes in place. Franchises typically provide them with that “formula” as well as mentors or coaches who can guide them through the implementation of those rules and methodologies.
With a solid infrastructure and experiences professionals guiding the way, an owner can grow his or her much faster while lowering the risks associated with building a new business. That last factor shouldn’t be downplayed. With the Small Business Administration consistently reporting that more than 50 percent of businesses fail in the first five years, IT services entrepreneurs need all the help they can get.
Brand Recognition. It takes years to build a good name and a solid reputation in most industries. By finding the right IT services franchise, solution providers can increase their standing much faster. When they take advantage of all the business support and training options their new partners have available, it can rapidly improve their operations and customer satisfaction levels. That quality end user experience is essential when attempting to build a successful brand.
Collaboration/Networking. For first-time owners of an IT channel business, access to peer knowledge and support can be crucial. Many franchise organizations offer their own proprietary platforms for sharing insight (tech and business) between franchisees as well as the parent organization. Regional and national events allow solution providers to develop closer bonds with peers, establishing business and personal relationships that foster creativity and improvement.
Marketing. Most franchise companies offer a number of promotional options, from programs and tools to proven plans for attracting and retaining clients. They can assist with the grand opening and the twenty-year anniversary, and a multitude of other activities in between. That can be a great advantage for solution providers with little or no practical marketing experience.
Training. In the IT space, this can be critical. Franchisors often develop alliances with a number of education and training partners to help their solution providers strengthen key parts of their business. They may subsidize the costs and/or facilitate the sessions, and work closely with franchisees to ensure both owners and employees get access to a broader catalog of instructional options each year. While training on the tools and technical processes is critical, many have expanded their curriculums to include leadership, sales and other business-enhancement classes.
Operational Support. Have a question or run into an issue beyond your capabilities? Most IT services franchises have staff members with the skills to help or have a network of professionals who can lend their expertise. Consider it a help desk for solution providers.
Purchasing Power/Vendor Support. Looking for more clout with suppliers and distributors? Most franchisors leverage their collective buying power to negotiate larger discounts or pricing options than individual solution providers would typically receive on their own own.
By no means is that list complete. The benefits of franchising vary by parent entity and market, so investing some time researching the various options is highly recommended.
This model obviously isn’t for everyone. It requires specific investments and a commitment to follow certain rules and policies that are created by others. You have to be willing to give up some entrepreneurial freedom but, in return, you gain access to a wealth of support and a proven model
While most franchises do allow owners to customize their services and portfolios, there are certain expectations and standards that still have to be followed. That allows solution providers to do what they do best with the support of a network of nationwide and, in some cases, international partners. Is a franchise the right option for you and your business? It might, but be sure to do your homework before making any major investments.
Brian Sherman is principal consultant at Tech Success Communications, an IT channel business development and marketing firm. He served previously as chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.
