IT and Business Insights for SMB Solution Providers

Are You a Fit for Franchising?

Buying an IT franchise can be a shortcut to success, provided you don’t mind accepting standardized tools and processes. By Rich Freeman
Reader ROI: 
FRANCHISE ORGANIZATIONS offer ready-made business processes, discounted software, and a nationwide network of peers.
THEY ALSO, HOWEVER, require channel pros to accept standardized tools and processes.
PEOPLE WHO CAN LIVE WITH those constraints often have no particular background in IT.
THE BEST WAY TO DETERMINE if the franchise life is for you is to speak with as many current-day franchisees as possible.

EVAN STEIN WORKED FOR YEARS in corporate IT before going out on his own in 2003. By 2006, his break-fix business was producing maybe $60,000 a year in revenue. That was about when he and his wife had their first baby and agreed that she would stay home to raise their child.

“I needed to double the amount of money that I was taking home, but I wanted to do it in a way that didn’t involve me having to work twice as many hours,” Stein recalls. Buying an IT franchise from CMIT Solutions Inc. enabled him to shortcut the process.

“I knew very little about building out a service delivery team. I knew less about sales and marketing,” says Stein, who today owns two franchises, both in Manhattan. “They gave me all those systems and all those tools that I was looking for.”

Stein is far from the only entrepreneur to find buying a tech franchise appealing. Austin, Texas-based CMIT Solutions Inc. is one of several leading IT franchisors currently on a hot streak.

“We have more than doubled in size in the past three years,” says Chuck Lennon, executive vice president for business development at franchise organization TeamLogic IT, of Mission Viejo, Calif.

Like others in the industry, however, Lennon is quick to admit that IT franchising isn’t for everyone. Whether it’s right for you depends largely on how much value you attach to expedience versus independence.

Out of the Vacuum

Fans of expedience, for example, will appreciate the tested, ready-made business processes that franchisors provide in areas like HR, finance, and marketing. The instruction on pricing alone is invaluable, according to Nick Zafer, owner and general manager of a TeamLogic IT outlet in Kalamazoo, Mich.

“If you’re on your own trying to figure out how to start an IT business, you can make some really big mistakes and [cause] misunderstandings when it comes to pricing,” he observes.

“Not every decision is going to be directly aligned with what’s best for you as an individual.”

EVAN STEIN, PRESIDENT, CMIT SOLUTIONS OF WALL STREET AND GRAND CENTRAL

Franchise organizations have far more time for industry research and trend-spotting than most independent channel pros too, notes CMIT President and CEO Jeff Connally.

“Unfortunately, many independents out there are just in a vacuum,” he says. “They don’t have the market intelligence of what’s really going on.”

The clout that comes with buying software, hardware, and line-of-business solutions in bulk enables franchise organizations to get discounted rates and expedited tech support, adds Connally, who notes that franchisees can also turn to noncompeting peers all over the country for help serving clients with out-of-town satellite offices. Stein, whose customers include banks and investment firms, takes advantage of that opportunity regularly.

“Through the network of CMIT owners, I can provide the same support for all those branch offices that I can for the main New York City-based offices,” he says.

Franchisees lean on peers for management advice and business insights too. Most franchise organizations encourage that kind of collaboration via online forums and peer mentoring groups.

“We’re trying to help each other [and] help the whole network grow, because it helps us all,” Zafer says.

About the Author

Rich Freeman's picture

Rich Freeman is ChannelPro's Executive Editor

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