The franchise industry is all abuzz, and the talk is about technology-for good reason. Technology is paving the way to the future, leaving a need for entrepreneurs who can help lessen the impact of today's rapidly widening digital divide. Stepping up to bat are technology consulting, service and training franchises offering a broad range of services, such as hardware repair, networking, software/security consulting and website development. We talked to some of the franchise players about what factors are causing this demand, how the digital divide is shaking things up and why the time is ideal for franchisees in particular to enter the scene.
People are becoming increasingly dependent on technology, using computers for a range of activities from shopping online to finding love. A 2004 survey conducted by the Stanford Institute for the Quantitative Study of Society determined that the average U.S. internet user spends three hours a day online. The internet has actually caused a decrease in the amount of time these users spend watching TV and doing other activities. The study also confirmed that Americans are more connected than ever, with as much as 75 percent of the U.S. population having access to the internet either at home or at work.
Chip Reaves, 35, national director of Decatur, Georgia-based Computer Troubleshooters USA, a computer services and support franchise, has noticed that residential users have become a higher percentage of the franchise's customers in the past two years. "More home users are willing to pay to have us come out and work on their computers," he says. "People are becoming so dependent on e-mail and [the internet], with kids using it for homework and parents balancing the checkbook on it."
Businesses have also discovered an online presence is necessary for brand awareness and company sales. A 2004 survey by market research firm Harris Interactive estimated that 70 percent of U.S. small businesses have an online presence, a sharp increase from the SBA's 2002 figure of 35 percent. "Technology not only helps you run your business more effectively-sometimes it's the only way you can do it," says Camille Hamilton, 44, who has been a franchisee of on-site computer training and support franchise CM IT Solutions, based in Austin, Texas, for nearly four years. "When companies don't have internet access, that can impact their bottom line."
Long gone are the days when viruses only affected humans, and the words spyware and spam were not a part of our everyday vocabulary. A 2004 survey conducted by America Online and the National Cyber Security Alliance, a public-private partnership focused on promoting cyber security and safe behavior online, revealed that 80 percent of the users surveyed had spyware or adware programs on their computers. And this estimate is conservative-some surveys report numbers as high as 90 percent. These elements have forced computer users to face the sobering fact that, while computers can be helpful, they come with their fair share of problems-which often require professional assistance. Says Hamilton, "Technology is becoming something the brother-in-law can't come in and fix on the weekends."
Naturally, the misfortune of some has become the fortune of others; and largely due to the onslaught of such problems, technology consulting franchises grew by nearly 50 percent in 2004. Franchises like CM IT Solutions, Computer Troubleshooters USA and Expetec Corp. are eager to come to the aid of frustrated computer users. "It's not getting easier for people to dig these worms out," says Lonnie Helgerson, 42, co-founder of Expetec in Aberdeen, South Dakota. "As we compete on what you'd call an electronic scale with the internet, that's going to become a cost of business."
As a result, businesses are increasingly turning to tech-oriented companies for solutions to their computer needs. Helgerson notes that the biggest growth in clients in 2004 came from small and midsize businesses, as businesses realized it's cheaper to contract with a tech company than hire a full-time computer technician.
Meanwhile, Reaves of Computer Troubleshooters USA believes that customers tend to have more confidence in calling a franchise for assistance than an independent consultant. Says Reaves, "Working through a franchise structure, the customer gets a lot of peace of mind that [he or she is] dealing with a credible organization, not just a fly-by-night operation."
Bridging the Divide
One of the main factors spurring growth in certain tech-related franchises is the threat of an ever-widening digital divide between the computer literate and illiterate. With the threat of this growing gap, the spotlight is being directed toward educating youth, thereby bringing together two rapidly growing forces: technology and children. And as the forces meet, opportunities abound for franchises like Computertots/Computer Explorers, which specializes in offering technology education for schools, kids and adults. "There have always been four core subjects in education: social studies, science, math and language arts," says Art Coley, CEO of Cypress, Texas-based CTCE. "Now there's a fifth subject-and that's technology. Technology touches our lives every day."
For the past 20 years, CTCE has largely focused on serving children ages 3 to 12 in the private sector, including independently owned and chain preschools, child-care centers and private schools. Now, says Coley, the doors to the public school system are opening thanks to two factors: the No Child Left Behind Act, which prioritizes both technological fluency and use of technology to facilitate learning in the elementary school classroom, and the fact that computer skills are quickly becoming a requirement in today's job market. "When we look ahead 20 to 50 years, the difference between people around the world and in our country won't have anything to do with their age, sex, color, religion or gender," says Coley. "It's going to have everything to do with technology-how we understand it and use it."
Technological fluency has become crucial for living in today's society, and it will only continue to grow more prominent. CTCE is pairing up with KinderCare, a leading provider of child care and education, to become the technology provider at the more than 1,200 KinderCare centers across the country. To accommodate the demand coming from all sides, CTCE plans to add a minimum of 50 to 100 franchises annually. Currently at about 100 franchises, Coley says the company doesn't plan to stop expanding until it reaches 500. "There are four-and-a-half million preschoolers and 50 million children in [kindergarten through eighth grade] across the country," says Coley. "Considering [that] today we serve about 30,000 children, there's plenty of room for growth."
Getting In on the Action
Becoming a tech franchisee might be appealing, but can also be intimidating due to the fast pace of the industry. However, there are a few key facts that might ease your qualms.
First of all, franchisees can set up shop right from their homes, since most of the services offered by these tech franchises require franchisees to go directly to their customers, not vice versa. CTCE's franchises are all homebased, and Reaves of Computer Troubleshooters USA estimates that 90 percent of his company's franchises are run from home. Reaves says potential franchisees like the homebased option since it helps keep startup costs low.
For Hamilton, being homebased was a definite selling point when she was considering purchasing her CM IT Solutions franchise; in fact, she was even more attracted to the franchise from a lifestyle perspective than a financial standpoint. Before getting laid off, Hamilton had been able to work from home for her previous job and had grown attached to the lifestyle it allowed her to have. "I had been working from home for 18 months," says Hamilton. "The whole idea of going back to the corporate grind was really nauseating for me." More than four years later, Hamilton is still working from home and loves it. However, she cautions people who are thinking of doing the same to examine whether they have the space to be able to live and work out of the same place as well as the discipline to clearly separate work time from personal time.
Secondly, contrary to what you might think, being tech-savvy is not necessary for becoming a tech franchisee. More important than personal expertise is finding dependable and knowledgeable employees who are capable of handling service calls. Though Hamilton is a tech whiz herself, having worked for 20 years in corporate IT organizations, she largely depends on her team of five part-time employees to tend to her customers' needs and stay up-to-date with all the technological developments. By building a skilled team, Hamilton has also been able to build her sales to a projected $200,000 for 2005, experiencing nearly 100 percent growth year after year.
Finally, the structure and support of a franchise system can greatly assist potential franchisees who fear the consequences of striking out on their own in such a rapidly changing environment. A franchise system is crucial for helping tech franchisees stay current. CTCE has a team of people regularly updating its curriculum and developing new materials as emerging technology is introduced-including robotics, digital cameras and microscopes. Expetec and other franchisors use online forums to keep franchisees up to speed with developments.
Times Are A-Changin'
In this era where spam fills our inboxes and new viruses are capable of instantly wiping out a wealth of valuable information, staying abreast of technology has become crucial for computer users of all kinds. Technology can open the door to success for a business, but being ignorant of the dangers and being unprepared to deal with problems can shut the door just as quickly. Franchises offering tech consulting, services and training are growing rapidly, offering more opportunities than ever. And franchisees of those businesses will find that the skills they possess and the solutions they provide can be as valuable as gold.
On Your Mark, Get Tech, Go!
Pumped up about starting your own tech business? Begin your research here with the following franchises:
New Horizons Computer Learning Centers
Concerto Networks Inc.
Geeks On Call America