Business Franchise

So, I decided to continue the Internet franchising topic using the example of the most (as I think) well-known company in the sphere of web-consulting. I mean the WSI  or (as they call themselves) #1 Internet and Technology Services Franchise.
 And what do they mean by Internet and Technology Services?
The first thing I need to speak about is their target market and the problems they are trying to solve. WSI helps small and middle-size private companies to use the Internet resources as efficient as possible. Does it mean that many of them are using the Internet inefficiently? Unfortunately, yes. Global network provides a lot of opportunities to decrease costs and to increase sales at the same time. It allows to increase productivity and to improve the communication with the clients, suppliers and partners. It opens a wide variety of different marketing instruments (not only just web page registered in Google…).
But for most middle and small-size companies my previous paragraph brings nothing more than a disappointment. They understand that do not have enough experience in e-business and Internet technologies and have no time to study it.
 

So, WSI decided to present solutions that assists these businesses. They’ve created proven and patent pending Business Systems and established an outstanding Franchise System to reach as many small and middle-size companies as it’s possible!
 What do you need to know before making a decision if the become a WSI franchisee? I hope the following summary can be helpful.
 

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Number of current franchisees: 1,000 franchisees in 87 countries around the world. More than 1500 offices of the company.
Franchise fee: $49,700 USD
Founded: 1995
Franchising Since: 1997
Estimated total cost of franchise: As the franchise is a home office based enterprise, costs on top of the initial fee are small. I can even say that it’s equal to franchise fee, not more.
Territories Available: There are franchises available both nationally and worldwide.
Royalty fee: 10%
 The main idea:
As new Internet technologies appear and will continue to appear, as a trained and certified WSI Internet Consultant, franchisee is positioned to assist businesses in capitalizing on these new possibilities.
WSI franchise program includes compulsory training of all potential franchisees to become Professional Internet Consultants, allowing them to act as a one-stop shop of internet solutions for small and middle-size businesses. Consultants help boost firms’ internet profits by offering a variety of web-based services, while still being able to work from the comfort of their own home.
As they say
“WSI liken their Internet Consultants to ‘architects’, who assess their clients’ business needs using WSI’s Lifecycle System. Each client is then provided with a tailor-made internet solution, which aims to both reduce business overheads and increase revenues.
Once the internet solution has been formulated, it is then independently built at one of WSI’s Global Production Centres, located in a low-cost, high-tech area such as India or Australia. The clients are then delivered a results-orientated, technologically advanced internet solution at an economical cost”.
To train the company also uses the Internet technology called e-learning or on-line education. It provides additional benefits to the potential franchisee as this variant is much cheaper (no transportation costs, you can choose better time and stay with your family).
 

Following current support:
WSI uses developed by themselves Client Support System. It can provide franchisees with an on-going stream of reoccurring revenue from each client. The company also helps franchisees by offering an on-going support program that is custom-made to meet the unique needs of each new franchisee.
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 As for me, I think that I’d buy the franchise license. Why not yet? Maybe because I still see a very serious competition in that field. Certainly, the WSI company has a well-known brand and a wonderful advertising campaign, but…
Small business owners are trying to save every dollar and pound. And there are too many freelancers in the consulting sphere (undergraduate and graduate students and even former employee of WSI franchisees) that can provide that services for lower costs. I agree that in most cases WSI-trained companies using good software and technologies will perform better quality. But I’m still afraid…. Can anybody overpersuade me?

Ok, I’m back to continue writing about Internet and computer franchise opportunities. Last time I was so busy that I managed to write only about the first – providing web-services. So, now I’m going forth.
 2. On-site computer services will be the next idea to write about. The franchisee has to hire a specialist(s) in the technical sphere. Usually it’s not necessary to have prior experience in computer repair because franchisor will provide all the training. For example, Geeks On Call® Company says:
“Everything starts with “Geek University,” which is an in-depth, weeklong training program”
 

The benefits: the market of home and office computers is rather big and it’s growing; franchisor provides training and some other useful stuff for start-up (business plan, results of marketing research and so on); you can reach small business owners and households large service-centers are not interested in.

The potential losses: the competition in the industry is very tight; every technical specialist with even little experience in computer-repairing can provide the same services himself anв for lower cost (as he doesn’t have to pay royalty and other payments to franchisor).
 (to be continued)

Internet business or e-business as many professional call it is rather modern trend in the world economy. Many people believe that it’s only a nifty and we will see the failure of that businesses soon. The others truly believe that it’s a panacea and every company has to move it’s business to the web.
 Anyway I’m not going to discuss this topic (or maybe not now). I want to present my ideas about franchise business though the Net and in the Net.
 

The first thing I want to write about is the following. Internet is not a new sphere of business but it’s only an instrument. To make my thought clearer I want to use the example of a phone. A phone is an instrument to call somebody or somewhere. For example, if you need to call in an ambulance it makes you no different whether to use mobile, radio or a public call box. They are only instruments to reach the doctor! The same can be said about the Internet – it’s only an instrument to improve your casual activity. You can use a post office of e-mail. You can go to casino or play poker online… You can sell you products through the shop or set-up the Internet-shop… The same happens in the sphere of franchising. Franchisor can advertise his business in the business pages of newspapers, on TV or on the Internet. As I understand it has no difference at all.
 My second thought is about franchising of Internet-based and computer-based business. As I understand it will include ATM, computer, Internet, ISP, web design, wireless, home electronics, web hosting and other technology related franchises and business opportunities. So, as you can see it’s not just selling through the Net but much wider. I decided to write few words about some franchise ideas that fit the definition of Internet-based and computer-based franchise.
 

1. Providing web services. Franchisee is usually operates as a consultant in the one or some of the following spheres (not the complete list certainly):
Website Design
E-Commerce Solutions
Application Development
Content Management
Search Marketing
Web Advertising
Site Hosting & Technical Support
  The benefits: as a franchisee you do not need to have special web-knowledge – the franchisor will do all the job; you operate in one of the fastest growing industries in the world; you can meet small business companies in your region (very small ones).
The potential losses: the competition in the industry is very tight and you may have not enough education to win it.
 (to be continued)

There are some countries (like some former Soviet Union republics) where still there is no legislation about franchise. But even there You will meet McDonald’s restaurants. Certainly they do not use the word “franchising” during the registration. Usually it’s organized as joint venture but all the other characteristics remain the same.
 At one business seminar I’ve heard a question: can anybody cook the hamburger better and tastier than McDonald’s? Most of people said that they not only can but the cook better hamburgers. But then the trainer asked the second question. Can you create a business system that will operate as efficient as McDonald’s? The silence has been established….
 

You can criticize their food, you can dislike their traditions… But being honest to yourself you will agree that their business system – the franchising system –is one of the best since 1955.
  Create such a system for you business and you’ll become enough rich for the rest of your life. And students will study the history of you company!
 By the way, McDonald’s has more than 30,000 franchisees. And you?

iSold it (as they say) is #1 eBay seller. They managed to combine traditional and on-line drop-off selling business. You can bring them the things for sale and they will do all the rest – picture, list on eBay, control and after selling they will send you a check.
If you plan to join the iSold It Franchise Network you need to think over the following information.
Advantages:
-         Use national brand (there are more than 900 companies in the chain), wide advertising and public relations;
-         Use special (tested) software
-         Get help from real estate brokers;
-         Easier get SBA loan as the company was approved by the Franchise Registry program.
Costs:
-         $85,500 for a fully operational store, plus working capital;
-         Minimum 1,200 to 1,500 square feet;
-         Minimum 15 feet of frontage;
-         Located in a highly visible strip center;
-         Co-tenants include grocery and national chains;
-         Easily accessible with parking at the storefront.
Under the iSold it Franchise Program a franchisee also has to pay a monthly royalty 4% of the total sales (not gross or net profit). It means that there can be a situation when you have no profit at all but will still pay 4% from the price of every unit sold.

The eBay company continues to change the common point of view on Internet-business. At first they showed us that everything could be sold on the Web – goods, services, whole businesses and even the rights (for example, the right to give a name for a baby). Then they showed us that this can be a profitable business not only for themselves but for everybody who wants to spend time bidding. And now they introduce a franchise mechanism for those who wants to continue building the business with eBay.
  EBay franchise is more commonly called Ebay Drop Off Stores. The main idea lies in allowing ordinary people to drop off items to be sold on eBay on a consignment basis. Why don’t they do this themselves? Because some have no enough knowledge in computers and Internet, some have no digital camera or they are too busy for this. Usually they agree to pay a commission in the 30% - 50% range.
 But what are the benefits for professional sellers or producers? Why would they pay a commission instead of hiring a person or doing themselves? There are several reasons for this.
1. The procedure of selling on eBay takes time. It usually includes taking photos, posting the listing, responding to messages, collecting money, packing the item or items and shipping them. So, every businessman has to make a decision whether to outsource this service or not. The same happens when you need a lawyer – you can hire one or more or you can turn to a special company only when you need help
2. Professional eBay sellers know how to sell, they have experience and usually they have references that help them to get higher prices on eBay.

Everyday I get so many e-mails that are really spam advertising. But unlike many other Internet users I decided not to use anti-spam programs and services.  I delete these letters and messages by myself but only after some very brief analysis. You know, if to group that letters according to the products they advertise you will get a sketchy picture of small business trends. Why small? It’s obvious! Big companies will never use such a doubtful way of promotion as spamming. But for many small companies it is be a good variant.
 
You can ask why I write about spam in franchise blog? Coz recently I found some changes in a list of products. Much more people started to sell different types of software and computer programs for everyday use. And most of spammers introduce themselves as representatives of this or that big software development company.
 
As I see entrepreneurs can deeply feel the advantages of buying computer franchises. They can be absolutely new in that sphere. No problem – they will get all the necessary help with training services, maintenance, marketing and even financing. At the same time software-selling franchise can be cheaper to start-up especially when programs are distributed mostly through the Internet. You don’t need to pay rent, to buy shelves and other shop equipment. It seems to be very profitable! And it can become profitable even sooner that with other types of small business opportunities.
 
Interesting fact about software or computer franchise is that entrepreneur can not only get benefits from using the trademark, name and advertising. Selling software he usually is not the end of the relations with the customer. Later he will call for upgrade of sold program or will order another one as his/her business develops and they have more business processes to serve. Today the world of information technologies changes so fast that even few customers can provide software or computer franchise owner with a stable profit.