From cash converters to Kall Kwik, 94 per cent of franchise holders are, it seems, in profit, so it is surprising that the concept has not been adopted more widely by the IT industry. Surely the process of providing systems and solutions is sufficiently commoditised to be marketed as a franchised business?
The success of McDonald?s, Body Shop and Avis has been achieved through economies of scale, central marketing and training, and a homogeneous image maintained by scrupulous quality control. Of course, you don?t hear about the failed franchises, but it seems to me that the computer industry and its market are now ripe for a franchise operation which would bring IT products and solutions to the high street.
For one thing, the IT industry is characterised by entrepreneurial individuals with a pioneering spirit. There are plenty of unhappy wage slaves working for big vendors or smaller systems houses which would jump at the chance to be their own boss and run their own systems and solutions business. Not only is there no shortage of people capable of being excellent franchisees, but they also have the money.
And there are successful systems houses whose business model could be replicated. There are many ways that a computer solutions franchise operation could be set up, but it would probably necessitate delivering about 30 per cent products and 70 per cent skills ? a combination that home and business users need to solve their IT problems.
If other franchise operations are any indication, setup costs would probably be in the region of #100,000 for the stock, demo products, the right staff and a decent location, although some franchises cost as little as #10,000. Banks are often ready and willing to lend to franchises so, provided your credentials are right, you shouldn?t have any trouble borrowing.
Of course, money is only a small part of the equation. The biggest challenge and the most crucial element of any IT solutions franchise will be making sure that the staff have the right skills. There are some technical qualifications around, like those provided by Microsoft and Novell, and it would be essential that any franchisee offer those basic skills. But it would also be necessary for staff to have the business sense and experience to enable a franchise worker to go into a customer business and make the right recommendations. It is one thing to franchise a hamburger bar, another to franchise a business consultancy.
Along with training, the franchisor would also be responsible for the brand marketing and the creation of customer loyalty, which would benefit the local franchisees.
Franchisees would need to look for reassurance that a franchise proposition was viable. For this, the franchisor has to be able to demonstrate that the business has been successful as a provider of general products and consultancy. Franchisees would have to demonstrate technical and business competence, as well as interpersonal skills. They would also have to be prepared, financially and emotionally, for slow cash flow over the first year.
I?m surprised that more owners of reseller and integration businesses have not spotted the opportunities that franchising offers, worked out the business plan and the formula, and marketed it.
Of course, running a business franchise with a good brand profile and track record is no guarantee of success and franchises can fail, but statistics indicate that the odds are good. For the franchisor, licences can provide an alternative income to going to the stock market, another way to capitalise on original investment in a systems or solutions house.
All franchise operations benefit from the emotional and financial support of being part of a nationally recognised chain. There is a security in being part of a proven business system which offers a bridge between out-and-out entrepreneurialism and the safety net of being employed.
The franchise concept is already being used widely by mobile phone vendors and, although there is a world of difference between selling a phone and installing and maintaining a business application, the step can?t be an impossible one to make.
It?s not unlikely that franchised IT systems and solutions businesses will be like buses ? all of a sudden, three or four will arrive together.
Automation firms UiPath and Automation Anywhere close out their funding rounds with $265m and $300m respectively
View photos of last night's awards ceremony in London
View photos of all the winners from the 2018 Channel Awards
After a glittering awards evening in Battersea celebrating 25 years of the Awards, we are pleased to share the list of winners and judges' commended winners