Web Innovations Sell Franchises
Printed in USA Today
by Nancy Rathbun Scott
So your prospective franchisor has a web site. Doesn't everybody? The real question is: What's the franchisor doing with that site? Impressing a skeptical client who's looking over your business? Luring more business to your entrepreneurial doorstep? Giving franchisees a competitive edge?
The best franchisors are doing all this and more-which is why sharp investors scrutinize a franchisor's web innovations.
Mail Boxes Etc.: State of the Art and Improving
At Mail Boxes Etc., franchisees, prospective franchisees, and customers can access the company's new, state-of-the-art intranet system. Microsoft is behind the technology. "There is symmetry between the internet resolution and the franchise system-and it is very good for franchising," says Nigel Burton, director of Microsoft's value-added provider and small business group.
Microsoft offers an extensive menu of intranet goodies, including a contact manager, franchisee directory, marketing calendar, document library and keyword search retrieval, industry and franchise news, marketing repository, document delivery, supplier communication, training venues where franchisees can pull down the latest operations manuals, real-time "chat" communications, and chatroom training.
"Once you open up to the internet, you can do all that stuff easily," says Ken Ross, vice president of Mail Boxes' domestic sales. And, in franchising-where the system is the power-instant access to information makes sense.
"We're not doing this because we're the greatest tech-heads in the world, but because-frankly-with 3,500 stores out there, if we had to communicate with these people by paper and put together a monthly package to mail to them, you can appreciate what kind of job that would be."
The intranet, on the other hand, is current, free for the price of a phone call, instantly updatable, and, of course, affordable. "Every time we do something manually-like publish documents-our first question is how can we put this on the intranet."
Things will only get better at Mail Boxes, Etc. Two years down the road, Ross says the intranet system will incorporate a VSAT computer system in all stores, leaving franchisees online 24 hours a day through the VSAT 'pizza' dish. "The satellite-networked, point-of-sale system will automatically download sales information on a continual basis."
Aaron's: A Better Mousetrap
Bill Wilson, Aaron's Rental Purchase's regional director of franchise development, says Aaron's actually wanted to avoid the "usual web site flash and sizzle," Instead, the company stresses real information and lots of it.
"The purpose of our new web site is to sell franchises, Our intranet reader-reply card allows us to qualify people. In exchange, we instantly give them additional information. Aaron's is a little unusual in that we publish an earnings claim and use it aggressively in our advertising and on our web page."
To get to the earnings claim, however, prospects have to disclose some of their own information-name, address, telephone, $175,000 liquidity, net worth in excess of $350,000, a desire to be a business owner, readiness to act within a specific time frame, and answers to specific questions. "Once that's confirmed, they immediately get the earnings claim online."
Wilson suspects the density of Aaron's web page and candor about the financial commitment involved in an Aaron's franchise purchase will winnow out all but serious, above-average contenders. "We enter immediately into a transactional relationship. They can access some pretty powerful information on our web site-the sort people usually don't get that early in the process-if they are willing to do the digging."
The Entrepreneur's Source: National Presence
The web site of The Entrepreneur's Source does double duty. For some time, it's been a logical place for prospective franchise owners to begin looking for a suitable franchise. Several thousand online prospectors flock there each month, filling out online profiles and submitting them electronically. Terry Powell, CEO and founder of the 14-year-old franchise consulting firm, explains. "We assign each client to a franchisee consultant who's trained in our exclusive match process. That enables the client to pinpoint franchise opportunities that will meet his goals, needs and expectations."
Lately, The Entrepreneur's Source web site touts a new opportunity, though. "We just started awarding franchises nationwide to people who want to be in the franchise consulting field and help other people find the right franchise,"
The internet acts as a support system for these new franchise owners. "We give intensive support to our consultants-coaching and mentoring them as they profile and match each client. Our databases here at headquarters can pull up opportunities for the consultants, who are busy working hands-on with the client,"
The electronically-facilitated process yields surprising results. "Over 95 percent of our clients end up in a franchise or business that they would not have looked at on their own, We contact companies and say, 'We've developed a client that we think would be ideal for a franchise like yours; would you be interested in taking a look? ' More and more franchisors are realizing that we can bring them a candidate that they wouldn't have received on their own."
GROUPadvantage: Technology Links
"Technology is like the engine under the hood," says Gary Larrabee, public relations director for Insurance Holdings of America LLC (IHA)-a company that hopes to revolutionize the insurance industry.
That engine recently raced ahead when Sam's Club contracted with IHA's franchise subsidiary, GROUPadvantage, to offer insurance products to Sam's Club members in all 440+ stores. The new relationship offers GROUPadvantage franchisees the largest affinity-group market in the country,
Larrabee says technology is the key to GROUPadvantage's potential. Insurance agents can access the system to offer customers one-stop shopping for commercial and personal insurance programs. That can include every insurance option from life, auto and home, to workers compensation and financial services. "We're not using the web so much for communications as for a technology platform to speed up, make more efficient and less costly the process of transacting insurance deals among the buyer, the insurance agent, and the companies that provide the insurance."
Brian McCarthy, IHA's CEO, likens the technology platform to that of The SABRE Group, which has revolutionized the transportation industry. "All the agent has to do is go to the client, sit down, get a phone line, set up the laptop, hook up to the phone, dial in, and get into the central computer database. The agent gets the rate quote and, if the customer is ready, he can execute the contract."
Such electronic commerce applications make things better for the customer, McCarthy says. "It takes the cost out of the insurance distribution system, eliminates all the redundancies, and allows the insurance companies that are distributing products through GROUPadvantage to charge lower premiums."
Your Office USA: High-tech Solutions
Whether you're a homebased entrepreneur or a corporate executive on the road, Your Office USA offers very personal-and very high-tech-administrative support, says Tom Galloway, CEO.
Let's say, for example, that your homebase is San Diego. Just present your membership card at any Your Office franchise location in the world, and watch your personal data pop on screen: how you like to have the phone answered, what services you're entitled to, what your credit limits are. Use the facility; then simply sign for the service. Your billing appears back at the San Diego office.
The streamlined, standardized system creates virtual Your Office locations worldwide. Clients have access to scanners, color printers, high-speed internet, and e-mail access. High-tech conference rooms feature state-of-the-art international video conferencing. Staff can help design web pages, create specialized computer presentations, and access remote network printing services. And then there's high-touch networking: Your Office clients are encouraged to do business with one another via introductions from the intranet database of members.
Netting Franchise Purchasers through the Web
Steve Swavely, a clinical neuro-psychologist, was looking for a professional change. He decided to search the internet by keyword 'franchise' and pulled up hundreds of different listings. "You can select by category or investment range and the search can go on forever," he recalls.
Luckily, Swavely ran into The Entrepreneur's Source-a concept that appealed to the psychologist in him. "It was the idea that Terry Powell-the founder and CEO-could create a profile on me and then match it up with a database of franchise opportunities." Not knowing precisely what kind of franchise he wanted to do, Swavely thought, "Hey, this is perfect-let me try this thing."
Submitting his personal profile online, Swavely gave The Entrepreneur's Source an indication of what he was looking for, his investment range, and interests. Powell e-mailed right back, setting up a telephone conference to complete the profile process.
"I was impressed that he took the time to discover what I liked and disliked about certain opportunities and then began creating alternatives for me to consider. I got intrigued by the profiling process. The reports that Powell sent me on my management and work styles astounded me. I couldn't believe how well he had captured me as a person!"
Swavely likens what happened next to the man in the commercial who says, "I was so impressed with the razor, I bought the company."
"I told Powell, 'If you're franchising this, I want to be involved.' It just happened that they were getting ready to launch so I became the company's first franchisee."
Now, clients are finding Swavely himself on the internet. "The web site tells clients who we are and what we do. It lends us legitimacy."
Swavely marvels at the power."When Powell told me I could do all this over the internet and have virtual clients, I didn't really believe it, When I opened my office in Charleston, South Carolina, in December, I had no local clients, but Powell sent me 50 inquiries from around the country to start my first day."
Now, about half of Swavely's clients are outside his base state. The remainder come from local advertising. Either way, it's no problem. He simply maintains contact through the company's internet e-mail program.

® copyright 1999 Nancy Rathbun Scott
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