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Catch The Wave

Grab your boards! Surf reports show the Internet is where the profits are breaking. These franchise companies can help you get a toehold for the big swells to come.
March 1, 1999
URL: http://www.entrepreneur.com/article/17378

The explosive growth of the Internet over the past few years has opened a new and exciting frontier for ambitious, net-savvy entrepreneurs.

The ever-increasing demand for Internet-related services such as search engines and e-commerce has turned once-small businesses like Yahoo!, Amazon.com and Excite into household names, prompting a feeding frenzy of their stock offerings on Wall Street and making their founders unbelievably wealthy.

With the advent of safe, reliable encryption processes that protect retail transactions, the Internet has become a global marketplace where businesses can sell their wares to customers worldwide without the high overhead of a physical location. As the number of Internet users increases, so will the numbers of visitors to e-commerce sites: IT research firm International Data Corp. predicted in 1998 that U.S. consumers will spend $54 billion per year on e-commerce purchases by 2002. According to the Gartner Group, the global e-commerce industry will generate more than $1 trillion in the same time period.

Many entrepreneurs aren't waiting for 2002 to get their piece of the e-commerce pie. A recent study by E-valuations research, an online market research firm, found that nearly 65 percent of small businesses are planning to develop transaction-enabled Web sites.

But while businesses are eager to take advantage of the vast opportunities the Internet presents, many are intimidated by the complexity of this new, virtual world. That's where Internet franchises come in. The relentless expansion of the Internet and the growing number of franchise opportunities could put owning a successful, high-tech business well within your economic reach--even if your name isn't Bill Gates.

Crash Course

Why would you opt to buy into an Internet franchise system instead of starting your own independent Internet business? One reason is that joining a franchise system makes it easy for technophobes to start high-tech ventures.

Worldsites, an Internet consulting franchise that provides Web site development and Internet solutions such as e-commerce and Internet telephony, actually prefers newbies over techies. "Technical knowledge can actually work against the franchisee, because when someone goes in and talks to [potential clients] about Java and HTML, it goes over their heads and scares them off," says Nigel Mayne, co-founder of the Toronto, Ontario, franchisor.

Worldsites franchisees (called consultants) don't need any background in computing or Web site design. The company provides the necessary know-how through its extensive training classes.

Or consider Quik Internet International, a Carson City, Nevada, company that sells ISP franchises. Most franchisees join the company with little more than a working knowledge of Windows 95. Tech expertise isn't needed because Quik Internet offers its franchisees an intensive five-day training program that covers every aspect of running an ISP business.

Another plus: Buying a franchise is often a less expensive way to get into the Internet industry than flying solo. For most entrepreneurs, the investment in host servers, high-speed T1 lines and other computer equipment required to start their own ISP is too daunting to even consider. Franchisors like Quik Internet provide a way to get into the ISP business without going into hock.

Quik Internet began as a small, homebased ISP run by Jack Reynolds, 39, a veteran Net surfer. With so many customers clamoring for Internet connections, Reynolds knew he was onto something big. So he called on longtime friend Murray Mead, 64, a franchise expert (and Internet newbie).

Mead was excited by the idea of duplicating Reynolds' ISP setup with a franchise system, and Quik Internet began franchising in 1996. The company sells space on a large server and network system to franchisees worldwide. Franchisees sign up customers for Internet access and offer customer support services in their exclusive territory. Quik Internet's central office handles billing and administrative matters.

Reynolds is enthusiastic about the benefits of franchising ISPs. "Part of what we're able to do is take the franchise fees and pool them in order to put into place more solid servers and networks than independent ISPs have," he explains. "Coming into this business as a new operator, you haven't got the resources to start that kind of network."

A franchise can also offer a way to test the waters as an Internet entrepreneur. According to Worldsites co-founder Dan Monaghan, 31, about half the company's franchisees sell Worldsites' Internet solutions on a part-time basis.

Personal Touch

If you don't need a lot of experience or money to get into an Internet franchise, what do you need? An affinity for teaching people and a way with customer service. Look for a franchise that assists you in developing both of those skills.

At Worldsites, franchisees get a crash course in computer basics and sales skills. "There's a lot of excitement about the potential profitability of the Net and its ability to tap into a global market, but there's also a lot of anxiety and fear about the Internet in businesspeople's minds," says Monaghan. "We're looking for educators and communicators who can teach people what's good about the Net."

The technical support franchisors provide lets franchisees concentrate on customer service instead of technical issues--something that's key to success.

"Having [Quik Internet] behind us lets us just take care of our customers," says Mike Lyons, 23, a Quik Internet franchisee in Boston. "We can take care of the tech calls that come in [and] keep customers happy."

Even in this high-tech industry, human contact is still the prime selling point. "The average end user doesn't know about hardware and doesn't care," says Lyons. "What they want [is] the kind of handholding we provide them."

The personal touch helps franchise companies stand out from the crowd of competitors. At Worldsites, franchisees are taught to emphasize customer service--not just Web site design. Says Worldsites franchisee Cleveland, "We develop relationships, as opposed to just selling sites."

Along the same lines, Quik Internet franchisees hold regular group meetings with customers. "It's much easier for us to take one or two nights a month to give lessons to a large group than to [teach] each [individual] customer how to use a mouse or Windows 95," says Lyons. "The classes also allow us to meet our customers and make sure they're happy. We get great referrals from them, too; people go home and tell their buddies [about us]."

Growth Curve Ahead

The Internet boom isn't just changing the way people communicate. It's also changing the way people do business. Given the relatively small number of people currently using the Internet, the markets for Web page development services, ISPs and other Internet businesses definitely have room to grow.

The best years of the Internet industry are yet to come, says Cleveland. "We've already seen growth, but the main benefits will be in the future. We're on the ground floor of something that's building."

Hang Ten

The following franchise companies offer Internet opportunities: