Online Franchises
Fast-food restaurants. Retail stores. Fitness chains. For most people, those are the images that come to mind when they think of a franchise.
It’s an easy idea to grasp — a successful business expands by granting others the right, for a fee, to open carbon-copy stores in untapped markets.
Now, a small but growing number of online companies are tailoring the concept for the Internet. Call it “virtual franchising,” where Web pages substitute for physical storefronts and customers drop by using keyboards.
“You eliminate a huge chunk of something that can turn the [franchising] process into a nightmare,” says Dan Martin, president of the San Diego software firm IFX Online, who sits on the board of the International Franchise Association. And as more business shifts online, he adds, “I guarantee you that more people will come in with online franchise models.”
Teri Gault is the founder of TheGroceryGame.com, a seven-year-old Web site that tracks the best deals at supermarkets for coupon-clipping consumers. The company generates revenue by charging members fees, which typically start at $10 for eight week’s worth of research on price deals at stores in their ZIP Code. Like many business owners, Ms. Gault saw franchising as the best way to expand her Los Angeles-based company nationwide. She rejected the idea of simply hiring staff in other cities because “I wasn’t sure I could trust employees that far away to be reliable,” she says. “I needed a sense of ownership for people who would be providing the customer service.”
Ms. Gault now has an online network of franchisees and company-owned territories in all 50 states, a system she says has worked for her. (She declines to supply details about her franchise fees, or how much franchisees typically earn.) New franchisees get a turnkey system that includes a training manual and access to GroceryGame’s proprietary software and databases, she says. When GroceryGame members log in, they are routed by ZIP Code to a franchisee’s Web page, which lists the best deals at local stores.
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Photo by TheGroceryGame.com.
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