Franchise Ownership: Is IT Right For You?

iStock_000026226158SmallOne of franchising’s strengths is the breadth of industries covered.

The International Franchise Association there are currently more than 750,000 franchise establishments in the United States covering approximately 75 industries; so if you’re wondering if franchising is right for you, the number of options won’t be a problem.

We spotted an interesting and informative blog post by Crystal Bedell about IT franchise ownership. IT professionals have an distinct engineering mindset, and we were curious as to how people in that group may go about considering the benefits and drawbacks of an IT services franchise.

Just as we happily share our vast point of sale experience and expertise with startup owners in order to help them make the best decisions from the very beginning, we at Sintel Systems are happy to share articles and commentary about the perceptions and reality of the risks involved in a career change into franchising — a major area of our point of sale (POS) expertise.

While not everyone has the technical background to become an IT specialist, the thought processes involved in consideration of franchising as a vehicle for one’s career are, in our opinion, valuable in many other circumstances.

Here are the highlights of Bedell’s post, “Deciding Whether IT Franchise Ownership Is Right For You”:

• Bedell concedes that there are only a handful of IT services companies that offer franchises, but believes the benefits of owning an IT franchise versus being an independent business owner may be worth the trade-offs.

• Bedell looks at Steve Hinch, general manager and owner of TeamLogic IT in Santa Rosa, California. Hinch often speaks to potential franchise owners about his experiences purchasing and running his franchise. He tells Bedell that two types of people tend to call him. “[The first type] are people similar to me. They’ve been in the corporate world and, for one reason or another, have decided or been forced to exit the corporate world, and they are looking at what to do next in life. … The other [type] has an independent IT company with one or two people, and they want to grow. They wonder whether joining the TeamLogic IT franchise would give them the ability to grow faster than on their own.”

• Both types of IT franchise owners have the potential to be successful, Hinch said. “It’s not a black-and-white kind of decision. As with any career choice, nobody is going to be perfect for this, and what you have to do is identify your strengths and where you’re not so strong, and decide that you need to build a team around you that is going to fill in your gaps,” he tells Bedell.

• Bedell also talked with Charles Weaver, CEO of MSPAlliance, a Chico, California-based organization for managed service providers and cloud providers. According to Weaver, entrepreneurs are typically attracted to the franchise model. “Someone more heavy on business skills and less heavy on technical skills would see a franchise as an opportunity to sell a solution made available to them. ‘I can sell it, market it, bill it and build a business that way.’ There’s nothing wrong with that, and it plays nicely with the skill set.”

• Having come from the corporate world and moved up the ranks from engineer to senior manager, Hinch knew he wanted to own his own business. He tells Bedell that he decided to venture out on his own when given the option to relocate to Colorado Springs, Colorado, to keep his management position at Agilent Technologies or take an early-retirement package. Before looking at franchises, however, he considered putting together a startup. “I decided that while starting a new startup from scratch could pay off, it had a lot of risk, and I wasn’t ready to take on that level of risk at this point in my career. So instead, I looked at how I could still own my own business but reduce the risk of failure to a more acceptable level.”

• In the post, Bedell also writes about Linda Kuppersmith, president and chief technology advisor at CMIT Solutions of Stamford, Connecticut. Kuppersmith had straddled the line between business and technology throughout her career and was looking to move from the back office to the front office. “I was looking to get away from just managing technology to working more closely with how to generate revenue with technology,” she tells Bedell.

• Kuppersmith met with a personal coach who helped her consider her options, including starting a business on her own or buying a franchise. “We looked at the options, and, by the end, it was clear that there was a big value proposition by doing this as a franchise. There is much less risk as well as capabilities that I wouldn’t have gotten as an individual.”

• Buying an IT franchise requires an upfront investment as well as monthly royalty fees, and both Hinch and Kuppersmith believe it is worth the investment. “I believe it was less of an investment for me to start a business through the franchise than it would’ve been [if] had I [started a business] on my own. I know that there are one-person IT companies that start with little money and they hang in there and do quite well as an individually owned business, but that was not my objective,” Hinch said, quoted in the post.

• “My objective was to be more than a [$1]-million-a-year company as quickly as I could and even get to $2 million a year,” Hinch tells Bedell. “In order to do that, you need to make a significant investment. By buying a franchise, a lot of the work around marketing [and] generating a list of target customers was all done for me and by people who know what they’re doing.”

• Kuppersmith also values the expertise and support she receives as a franchise owner. “I have access to an incredible network of other owners. We don’t work competitively because we have service areas. There are 140 owners, and a vast majority of them have a minimum of 15 to 20 years of experience in IS and IT and management, so it’s an incredible network. If I need advice, I can send an email to the network and get people’s experiences with a particular vendor or solution.”

• Hinch said he meets fairly regularly with the TeamLogic IT CEO and COO of headquarters to bounce ideas around. “That’s something I would not have if I were on my own — experienced people that have insight into what 60 other franchises are doing, and what works and what doesn’t work. I run sales pitches past them before pitching clients and get their feedback.”

• “My biggest challenge was staffing, and I think that’s pretty true with any IT company, whether a franchise like us or independently owned,” Hinch tells Bedell. “Finding good talent is always a challenge. When we opened our doors, it was still in the middle of a recession, so it was a little easier. I had lots and lots of applicants for my first position.” However, because Hinch had an aggressive growth plan, he needed to ramp up his staff quickly to attract customers that would facilitate that growth.

• Staffing was less of an issue for Kuppersmith. “Most owners end up starting their offices with part-time help or engineers from a neighboring office. A lot of times, the owner cannot make the investment into hiring people before they are producing an income,” she tells Bedell.

• “The thing that does frustrate me is that small organizations can be nimble and quick to change, and we’re large enough where we’re not quick to change anymore. In order to be able to implement some of the ideas that are unique to being able to have this kind of model and network, it means you need to coordinate 140 entrepreneurs,” Kuppersmith said, quoted in the post. “Building consensus is like herding cats.” She tells Bedell that six months might go by before a new product or technology gets vetted and is on the company’s product roadmap.

• Difficulty with coordination and response times is one of the restrictions of owning an IT franchise. “You can only do what the franchise is doing,” Weaver tells Bedell. “You may have customers that don’t lend themselves to a franchise model. IT services is not like McDonald’s, where you get a repeatable hamburger at a fixed price wherever you go. Consuming IT services is very sensitive. There’s a different perception from the customer.”

• Nevertheless, both Hinch and Kuppersmith tell Bedell that they are happy with the state of their businesses. Hinch now has seven technicians on staff, which enables him to focus on business development work. His franchise has earned the award for fastest-growing TeamLogic IT franchise year-over-year for two years in a row, and he attributes that to “following the franchise process.”

• Kuppersmith tells Bedell she wouldn’t be where she is without a franchise. “Success as a franchise owner is measured a little differently. It’s not just about the money you’re making, but for me, it’s the control I have over my life,” she says. “If I needed to leave the office early to attend an event with my kids or go to a doctor’s appointment with my parents, although my employers were great about allowing that, I had that guilt. As a business owner, I have no guilt. If I want to take off an afternoon or a day or a week, there’s no guilt. There are no expectations I have to meet but my own.”

Read Crystal Bedell’s full post here.

For more insights into the franchise-seeking mindset, check out our related posts, A Franchise Personality Fit For A King, Asked and Answered: 107 Franchisee Questions for Franchisors, Franchise Coach Sees A World Of Opportunities, If You Ask The Right Questions , Size Up Your Franchise Opportunities, and Franchisees Have It. Got It?

Sintel enhances our customers’ success by turning point of sale data into strategic decisions, allowing larger franchises to grow and providing startups the foundation for future growth from the very beginning by acting as a franchise incubator, nurturing their businesses for the long haul.

Don’t wait until late in the game to plan for your point of sale system. The benefits of establishing an early relationship with your point of sale company are many — not just in demystifying the process and determining the optimal system — even before you decide on a franchise direction.

Sintel Systems is the only direct to end user full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shopspizzeriassushi restaurantscafés and retail stores.

As a single source for business solutions, our experienced, knowledgeable team negotiates the complex POS landscape for you to enable you to find the right POS system for your business and budget. Hardware – Software – Support

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