Brand Licensing? Franchising? Reinveting the Wheel?

Mushin

New Member
Reaction score
0
After reviewing these forums for a while I see that many individuals are newly in business or just planning to get started. I have also noticed that some people have a made a foot hold in their area and are gaining traction.

Being interested in expanding beyond my local market areas and with a background that put me with a National Brand I have begun to wonder about our industry as a whole.

For the most part the industry is fragmented and a knee jerk reaction of many independents is to offer the lowest price possible in an attempt to gain or steal market share. A multitude of independents come and go with a large majority being part time or just getting by... not because of a lack of skill but because of the sheer weight of operating a business on their own.

So with a broad view of the landscape I wonder what the best way is to establish a true National brand to compete with the Geeks that we so often here about. The market can easily support another national brand because in a sense the collective of all independents (although fragmented) is a force that does compete to some degree.

Imagine if one or two independent shops or technicians from each city and town took on unified practices, brand, and adopted the same standard operating platform. These individuals could be a franchise of sorts, or licensees of a brand image, or part owners of a corporation. (There are many business structures and agreements possible)

National advertising and branding could be handled by brand license fees, royalties, franchise fees, co-op advertising or many other ways but this would free up a large amount of collective capital. Currently each independent or small shop must individually come up with marketing material, brand images, tools, supplies, arrange for distributors, remote support, phone systems, credit card processing, web hosting etc... (Take the business kit here as an example. A tool set that can be adopted collectively that does not have to be reinvented) everyone is reinventing the wheel in a business that really is not that varied from one shop to the rest.

How quickly could a national brand be established if a group such as we have here banded together to advance our businesses in a unified manner. How much operating capital could we free up and how much pull would we have with vendors, distributors, advertising agencies, etc.

I know this is a long post but I truly wonder if we are hindering our own growth by being fragmented. Clients have already proven that they are willing to pay $299.99 for onsite virus removals and $199.99 for in store simply because they trust an established Geek brand.

Are we really any different? (I willing to bet several here may be or may have been in the Agent ranks)

I'd love to get feedback and reactions on any point here.

Phil Jones - CEO
Site Tech
 
If you are trying to make a case for national providers on this forum, I don't see you getting too far. Sure someone might pay $200 to remove a virus, but to only make $50 from you for the same service does nothing for me. It also doesn't get around the fact that it is a ripoff considering what they actually do.

I am willing to bet that most people take their computer to geek squad not because of their brand, but because they're aren't aware of their options.

I apologize if I misunderstood your post, as soon as I assumed you were trying to sell us on joining a national provider I kinda skimmed over the rest of the post. Consider the fact that a lot of national providers really screw over the techs thy work for them. Also consider that you are preaching to people who want to work for themselves, not send the majoriry of their profits to someone else.
 
If you are trying to make a case for national providers on this forum, I don't see you getting too far. QUOTE]

No... what I am talking about is building a national brand made up of people like you and me. The difference is quite drastic. We all have gone into business for ourselves becasue we don't want to be an employee for someone else and we want to keep the profits we make.

You have a point about clients using a national brand because they don't know their options and this illustrates my point about branding. In your example the only option they knew about was Geek S. because it was this branding and marketing they saw.

Would they have come to me or you... very possibly if they knew we existed. If our brand was recognized. If we had the marketing to attract them.

So I pose this question... and this is purely for discussion. Would you pay (again just random numbers) $200 to have access to a National Brand and Infrastructure, phone systems, web site etc... but still run and operate your own business. (Kind of like a franchise but more of a co-op situation)

Could this increase you business? Could it help people find you? Could it reduce overhead costs?

Thanks
Phil
 
Without getting into Nationals, Franchising, Sub-Contracting, etc...let me say this.

I see exactly what your saying and where you are going with it. In my short and honest opinion, the entire problem revolves around the fact that this industry has no standards. Plain & simple.

Any John, Joe, and Mary can open a repair business easily. Which helps give small time guys like ourselves a bad name, hence pushing consumers to companies that have already built a trust with them such as BestBuy's Geeksquad.

At this point I am exhausted (just closed the store for good tonight :(), but I will go into detail after the mass responses lol
 
Last edited:
the entire problem revolves around the fact that this industry has no standards. Plain & simple.
Any John, Joe, and Mary can open a repair business easily. Which helps give small time guys like ourselves a bad name, hence pushing consumers to companies that have already built a trust with them such as BestBuy's Geeksquad.

Yes, yes, yes, this business has a very low barrier to entry. Give someone a car and a laptop and they are up and running but are they business people? Still to be determined.

I see the GS prices and think... hmm I should charge the same because I am just as good... actually better... actually the same... I have a Double Agent Badge and a DCI Badge, both are now retired. I trained many agents and sale people. I led a GS Precinct to the top 50 in the company in revenue.

So I charge similar prices not the same but add value and position my services differently. I secure my customers for life and take away any excuse to go elseware. But I don't do it by beeing the cheepest. I lock down entire neighborhoods and now those low cost $50.00 virus removal techs are coming to me for a job... or they raise their prices to my level in a hope to make more. In my local area I have made it a turf war, because I created standards, branding and positioning. At least in my local areas people are expecting these standards.

Lets let any John, Joe, and mary keep doing what they are doing but position us as the alternative rather than GS. This is what I have done in my market.
 
Without getting into Nationals, Franchising, Sub-Contracting, etc...let me say this.

I see exactly what your saying and where you are going with it. In my short and honest opinion, the entire problem revolves around the fact that this industry has no standards. Plain & simple.

Any John, Joe, and Mary can open a repair business easily. Which helps give small time guys like ourselves a bad name, hence pushing consumers to companies that have already built a trust with them such as BestBuy's Geeksquad.

At this point I am exhausted (just closed the store for good tonight :(), but I will go into detail after the mass responses lol

What you're describing sounds similar to what real estate brokerages do....

Work under their large, nationally recognized brand, they provide infrastructure, you pay them a percentage of each deal you close. Do I think this would work in our industry? It's tough to say, I mean there are so many aspect to this business, a large brand like that would have to create some form of uniformity in order to operate such a large scale operation.

Prices would have to be somewhat fixed (regionally atleast). If that is the case then you could have someone find a whole bunch of clients, then leave the firm and undercut them by chargind $.01 less (obvious exageration), and thus again fragment the industry.

I like the idea. I probably would consider doing something like that, but I would want to have a good amount of control over my business.
 
Although I am not in a position to join any type of co-op advertising or national brand group or franchise (or what ever you want to call it), I do think that it is an excellent idea. And an excellent time to do it. With the loss of compusa and FireDog there is a lack in this area.
I think of what pharmacies did a few years back when they were getting pushed out by the CVS and Walgreens. The small local pharmacies had they opportunity to join advertising groups (for the life of me I cannot remember the name) but the owners had full control over their businesses but hung the logo on their window and benefited from "trust your local pharmacist" advertising.
 
What you're describing sounds similar to what real estate brokerages do....

Work under their large, nationally recognized brand, they provide infrastructure, you pay them a percentage of each deal you close.

The realestate agencies are exactly one way that something like this coud be structured. You are also correct about someone leaving and undercutting but this is no different that what happens now. How many techs (how many of us) have done that already. Left a company to go on our own.

And atlanticjim is correct about maintaining a fair amount of control and keeping most of the money in the individual operations. If someone is working for themself, they have freedoms to grow and make money, they have the support from others, etc they proabably would not feel the need to go it alone. What would they gain?

Given high profits, marketing support, infrastructure support, and still keeping control of my business I don't think I would jump ship just for the heck of it.
 
I misunderstood your original post, so my apologies for my original response.

I personally don't think I would ever join something like this. Just the way I am. From my understanding of deals like this (which is very limited), there is usually a lot of fees to license everything, plus a ton of rules that limit the owner's ability to make decisions because it reflects badly on the brand, or someone in another state made some weird decision.

So you are selling a brand. Essentially a francise. Your business would do all the promotion while I am supposed to sit back and profit. Initially this would sound great for a business owner. Afterall, we would have less to worry bout. But, we are at the mercy of who we are franchising off of because if they want more money so they raise the fee 20% due to "additional costs", or they initiate a rule that all pads of paper need to be purchased from them because they include the logo and that all other pads of paper ar a violation of the rules. Of course, the penalty for not following these rules would be termination of the franchise license, essentially killing their business.

Take any fast-food chain. Everything in those stores have to be purchased from the main corporation or through a very specific vendor. As a customer, this is fine. They serve the same crap at my local location as the one 2,000 miles away. For the owner, it rules out any choice because they have none to make. Someone else has made it for them. If they do decide to make a choice, there are penalties. Sounds like an employee to me.

Sure, you may say you wont initiate any of those rules, but there is no guarantee.

http://money.howstuffworks.com/franchising1.htm
 
You are correct about franchises fees in general.

Take any fast-food chain. Everything in those stores have to be purchased from the main corporation or through a very specific vendor. As a customer, this is fine. They serve the same crap at my local location as the one 2,000 miles away. For the owner, it rules out any choice because they have none to make. Someone else has made it for them. If they do decide to make a choice, there are penalties. Sounds like an employee to me.

Sure, you may say you wont initiate any of those rules, but there is no guarantee.

http://money.howstuffworks.com/franchising1.htm

You are correct about franchise control and that is exactly why I did not become a franchisee. Besides the high upfront costs there are other fees such as royalties etc... I don't like paying those but I would say that If I could afford to own a McDonalds Franchise I would. Simply because it would be that succsessful.

But back to our situation.... I think a natioanlly recognized brand (Callit a partnership or franchise or licenseing) it doen't really matter would be a benefit for me to expand. I would take advantage of something like this and on the revese side if I would somone else might. So if their is a market why not explore the potential. I do not have a national brand. My business is doing well in my market and I think it is time to expand my market area... but how.

Maybe I can't tap into anything already out there but maybe I can. If not I may create something that will be a win win for everyone. Something that would have the ability to solidify the industry.

Ohhhh... More later. I have to run on a service call.
 
The realestate agencies are exactly one way that something like this coud be structured.

I would say that it's the glove that fits best- but it still doesn't best fit this industry. Actual cash going around is just far too small to be splitting up in percentages.

I think it would be nice if there was sort of a "Brand B" that all of us Non-Geeks can use while still preserving our fundamental rights as business owners and keep us as "United Individuals".

What does this mean? I propose an idea that if techs all adopt the same business practice, agree on a brand and apply said brand then we will be able to unite as an industry, under one brand with our own individual stores...keep your logo, but adopt the brand.

Also, this would mean there would have to be occasional audits and quality control checkups- which will turn away many techs.
 
Percentages. Clarification.

I would say that it's the glove that fits best- but it still doesn't best fit this industry. Actual cash going around is just far too small to be splitting up in percentages.

I think it would be nice if there was sort of a "Brand B" that all of us Non-Geeks can use while still preserving our fundamental rights as business owners and keep us as "United Individuals".

What does this mean? I propose an idea that if techs all adopt the same business practice, agree on a brand and apply said brand then we will be able to unite as an industry, under one brand with our own individual stores...keep your logo, but adopt the brand.

QUOTE]

First let me clarify something a bit... how you have stated it is very very much like what I am talking about but.... Structure wise realestate branding is the best fit.... but not as far as percentages go. I don't think there should be any type of ..... the branding portion takes X percent.

What I think would would best is some type of flat fee per month a the most basic level there is a brand licensing fee.

One catch.... would be that any company or tech would have to operate as that brand. No co-branding becasue this would just create confusion on the part of the cusomter and would defeat the purpose of the branding.

For someone to be behind this it would have to be 100% Like in realestate the agent is a remax agent. They are not Mike Realestate Company by ReMax.

If something like this were around I could see my self dropping my business name and taking on the other. Otherwise there would be no point each piece of marketing with two names will dilute the brand image. The customer would wonder who they are actually doing business with...

Still each individaul business would keep their own profits and make their own decisions within a collectively formed framework.

So Imagine this... and how fast if could get rolling.

1.) Adopt a brand.
2.) Unify Marketing
3.) Utilize a single web site
4.) Normalize pricing to some degree (no pricing control)
5.) Each business promotes the brand 100%
6.) Set a go live date.
7.) Have a National FREE Computer Diag Day or something big (like free burritos from Chipotle)
8.) Brand is now on the map

Nothing changes for each of us other than our marketing and name. We are not positioned as a national or international group

Initial size bradn adoption target 2 shops or individuals per large capital area.

Maybe 250 "shops" all branded the same?
 
One catch.... would be that any company or tech would have to operate as that brand. No co-branding becasue this would just create confusion on the part of the cusomter and would defeat the purpose of the branding.

That's the part that makes you lose the attention of the Tech Repair community. Co-branding doesn't hurt no one or cause any confusion. Consider it like this...

They adopt the branding scheme, mascots- colors- ethics- etc. but keep their name, ownership and have a flat-rate price that they can choose from for "General Price Assurance" e.g. Computer Diagnostic: $39.99 ~ $69.99 but once they choose their price they must make sure that the price stays that way for say...6 months and when the semi-annual QC check comes around they may be allowed to update their pricing to meet their needs.

Keep in mind that this is also not a program that will be good for anyone with a storefront as well- but someone that is actually established. Nothing hurts a brand more than an office/location gone awry...In fact, people will take abuse better than a shutdown. For example, have you ever seen a McDonalds go out of business?

In my opinion this is a great idea, but it should not be lead by a one-and-only owner or even an administration- but rather EVERY SINGLE STORE OWNER and keep it as a public Non-Profit Organization that regulates the industry (to an extent) who's standards can be adopted by any company without fee but the branding can be attained by a one time fee of $x,xxx until they reach a certain profit level which it becomes absorbed entirely into the brand. (I say the absorption thing loosely because after a company gets so big 1 manager can no longer manage it anymore, so it's best to let it become absorbed)


I see the benefit of this as people can have a unified source for parts- the purchasing power would be amazing- the recycling abilities of the organization would be tremendous and the impact it would have would be astounding- although it's not a "1, 2, 3 Setup"...it would take YEARS just to get the thing rolling- then to get it off the ground would take a lot of effort and hard work and finally to establish a good brand would probably take an entire decade- don't expect an overnight- or even a mid-term results.
 
Last edited:
That's the part that makes you lose the attention of the Tech Repair community. Co-branding doesn't hurt no one or cause any confusion. Consider it like this...

They adopt the branding scheme, mascots- colors- ethics- etc. but keep their name, ownership and have a flat-rate price that they can choose from for "General Price Assurance" e.g. Computer Diagnostic: $39.99 ~ $69.99 but once they choose their price they must make sure that the price stays that way for say...6 months and when the semi-annual QC check comes around they may be allowed to update their pricing to meet their needs.

Keep in mind that this is also not a program that will be good for anyone with a storefront as well- but someone that is actually established. Nothing hurts a brand more than an office/location gone awry...In fact, people will take abuse better than a shutdown. For example, have you ever seen a McDonalds go out of business?

In my opinion this is a great idea, but it should not be lead by a one-and-only owner or even an administration- but rather EVERY SINGLE STORE OWNER and keep it as a public Non-Profit Organization that regulates the industry (to an extent) who's standards can be adopted by any company without fee but the branding can be attained by a one time fee of $x,xxx until they reach a certain profit level which it becomes absorbed entirely into the brand. (I say the absorption thing loosely because after a company gets so big 1 manager can no longer manage it anymore, so it's best to let it become absorbed)


I see the benefit of this as people can have a unified source for parts- the purchasing power would be amazing- the recycling abilities of the organization would be tremendous and the impact it would have would be astounding- although it's not a "1, 2, 3 Setup"...it would take YEARS just to get the thing rolling- then to get it off the ground would take a lot of effort and hard work and finally to establish a good brand would probably take an entire decade- don't expect an overnight- or even a mid-term results.

Hmm. We are on the same page in many aspects. Time frames... possibly long term, possibly fast. There is no reason it could not happen in a blitz type way if... if.... enough attention was drawn to it... We are in an era where brands are created overnight. Twitter, facebook, my space, etc.... They popped up in fairly shrot order. Still this would not be something to rush through.

I am torn on the Co-Branding.... I see your points but I have never been a fan of co-branding situations. I see all kinds of openings from any form of competition, even those not part of the "association." Still this would be a way to make it happen and if the goal is a national brand this could be a way to do it.

You have some insight so let me ask some questions.

What pricing would you think adequate for aopting the branding for a participant?

What resources should members have acccess to?

What advantage would a non-profit structure give over a for profit? (Obviously their would need to be contracts it both situations and the contracts would protect both parties.) How feisable would a non-profit be down the road if a company becomes "absorbed."

Can you explain the "absorbtion" idea. I got a feel for what you mean but I still am not quite sure exactly what you mean?

Why would it not be good for a store front? McDonalds stores close too? ;)
(As long as the store front is sound.)

So many questions... Lets leave it at this for now.

Thanks for the constructive points of view.

Phil
 
What pricing would you think adequate for adopting the branding for a participant?

What resources should members have acccess to?

What advantage would a non-profit structure give over a for profit? (Obviously their would need to be contracts it both situations and the contracts would protect both parties.) How feisable would a non-profit be down the road if a company becomes "absorbed."

Can you explain the "absorbtion" idea. I got a feel for what you mean but I still am not quite sure exactly what you mean?

Why would it not be good for a store front? McDonalds stores close too? ;)
(As long as the store front is sound.)


Why leave it where it's at? Once you start a good conversation you simply can't end it without having some sort of closure now can we?

Q: What pricing would you think adequate for adopting the branding for a participant?
A: I think there should be three tiers to it. Silver, Gold and Platinum membership. Silver has you doing the least amount of changes to your company, with less benefits and the lowest fee, whereas Platinum has you doing the most amount of changes to your company with the most amount of benefits and the highest fee. Also, you have to make a certain amount of money per year even to qualify for certain membership ranks.

Each tier should have sub-tiers for the size of the company...in this case I would go for Total Annual Profit. It would go something like this...

Silver Membership
  • $25,000 ~ $50,000 - $500 / Year
  • $50,001 ~ $75,000 - $750 / Year
  • $75,001 ~ $100,000 - $1,000 / Year
  • $100,001 ~ $250,000 - $1,500 / Year

Gold Membership
  • $50,000 ~ $75,000 - $1,000 / Year
  • $75,001 ~ $100,000 - $2,000 / Year
  • $100,001 ~ $250,000 - $3,000 / Year
  • $250,000 ~ $500,000 - $5,000 / Year

Platinum Membership
  • $75,000 ~ $100,000 - $2,000 / Year
  • $100,001 ~ $250,000 - $4,000 / Year
  • $250,000 ~ $500,000 - $6,000 / Year
  • $500,000 ~ $1,000,000 - $10,000 / Year or Absorption.

----

Q: What resources should members have acccess to?
A: Well, I won't go into details about what tiers get what- but you can have things like a recycling facility, spare parts, new parts, whole computers/laptops, instant help support forum for problems they cant solve. I can literally think of hundreds if not thousands of things a member can or can't have access to.

----

Q: What advantage would a non-profit structure give over a for profit? (Obviously their would need to be contracts it both situations and the contracts would protect both parties.) How feisable would a non-profit be down the road if a company becomes "absorbed."
A: A Non-Profit would give the tax advantage thus saving you money for better things like a recycling facility, advertising, etc.

----

Q: Can you explain the "absorption" idea. I got a feel for what you mean but I still am not quite sure exactly what you mean?
[b:]A: [/B] I mean the MAIN BRAND takes control of the members shop entirely. That or they just keep on paying to stay as a platinum member- or even introduce a "Diamond" tier which only has the added benefit of keeping your store. The MAIN BRAND is actually just another member of the Non-profit section- only it's the prime member who doesn't have to take part in giving money to the company and has full access to all facilities- let's call it the "Rhodium" Tier.

----

Q: Why would it not be good for a store front? McDonalds stores close too?
A: Because a store closing down gives a negative opinion to your customers about the quality- or security of your company.
 
my mind is overflowing.

Q: Can you explain the "absorption" idea. I got a feel for what you mean but I still am not quite sure exactly what you mean?
[b:]A: [/B] I mean the MAIN BRAND takes control of the members shop entirely. That or they just keep on paying to stay as a platinum member- or even introduce a "Diamond" tier which only has the added benefit of keeping your store. The MAIN BRAND is actually just another member of the Non-profit section- only it's the prime member who doesn't have to take part in giving money to the company and has full access to all facilities- let's call it the "Rhodium" Tier.

I too had a tiered system in mind but with a slightly different take based on the services or access level desired.

Base pricing in my mind was $600 for the year with monthly options. Essentially to be able to brand (or co-brand) the business.

I would really have to check the legality of a non-profit mixing with the for profit side of things.

The absorbtion idea... gives me some worries I don't like the idea of taking oversomeones business... but I know what you are saying. I think it might be looked at it a bit differently. Once a business gets to a certain tier or an area is generating sufficient business to justify the costs.. additional resources would be invested in that business area. A hub could be created for people to work out of.

So here is the HUB Ided

A physical location that is fully branded with a large pool of resources. Independant technicians would be dispatched from here and could have access to branded vehicles. Customers could drop off their computers for repair and they would be worked on by business owners.

This would also be a recycle hub and other types of services could be offered from here.... Indepedant web designers, web servers, contract programers.. Majory MFG warranty work.

A structure would eventually need to be created like retail stores do with territories and districts.....

Lets back up a bit and look at the most basic of levels again.

Lets call it your Silver Membership and base it off of $50 / Month or $500 if paid in advance for a full year.

At this level you would get access to all marketing and branding designs the business owner is responsibe for their actual marketing activites in the local market such as flyers, business cards, signage, yellow page ads (co op pricing with other members in the area) etc...

They also get use of "global" resources such as the web site, advanced phone system, and possibly dispatch services depending on the total number of members and resources avaiable.

Lets set a target of 250 member... (would this be feisable?) paying $50 per month. That is $12,500 per month allocated as follows:

Global Staffing
------------------------
3 Dispatchers x 40hrs wk = 120 hrs * 12.00/hr ?? = $6240 per month

It would then leave another $6260 on the table for

Marketing and Infrastructure:
-----------------------------
Phone system expenses
services like remote support
training
global marketing


Does any of this sound feisable in particular the number of members?

Thanks
 
Does any of this sound feasible in particular the number of members?

No.

It's just too far of a grand scale. Almost no one would be actually interested in this unless it is already established. You would have to be willing to sell your existing brand as-is. Until you have a brand that people want, no one will buy into it.

Not to mention you can't branch out in random places in your state- let alone your region, or even country. You have to slowly creep into peering neighborhoods, cities, then grow into other counties, states, regions and finally move to the grand scale of international business- but to get there is almost impossible- it's something that Geek Squad only recently achieved.

Personally, in my opinion your getting way to far ahead of yourself and involved in a project that will be way over your head. Since you are not big- you can't think big but only dream big. Start out small and form your own repair business, build your brand, and then finally make your business flourish- show us why we need you, not the other way around.
 
I think you missed my back to the basics If not back to the baiscs.

Start out small and form your own repair business, build your brand, and then finally make your business flourish- show us why we need you, not the other way around.

I talking Micro now which is point A (starting out) and the previous post was the end result point Z. Keep in mind when I say global in the past post I mean global to the organization not global geogrphicly. A global resource is one that all members have access to.


Initial problems:
-------------------------------------------
Lack of recognition from the lack of branding an established brand.
Every owner must do everything on their own
Some owners are part time (who looks after their business when they are doing their 9 to 5)
Lack of buying power for AV/AS solutions and parts

Benefits: Baisc levels
1.) Already designed website to use as your own
2.) Already designed marketing materials
3.) Already designed forms
4.) Professional Phone system (800 number) PBX type
5.) Access to dedicated remote support techs ready to work on machines for you
6.) Mentorship and Traning
7.) Established reseller partnerships
8.) Dispatching services and job scheduleing assistance.


So on a basic level these are some the benefits for adopting a brand as I am presenting it. In this stage the brand is being establised in two ways. 1st by carving out areas of brand influence. Second by lowering overhead with each business member benefiting from the pooling of resources to gain access to these features. The lowering of overhead allows businesses to become more viable but the biggest benefit is a more professional appearance.

With access to dedicated remote support techs the businesses are able to operate in unique ways such as go on site to assess the problem and route the repair to a remote tech for completion while being able to move on to the next appointment. For an existing shop there would be access to labor on demand to help reduce turnaround times and prevent the need to hire additional staff. These are just some examples.

Going Micro still

10 Members at $50 would support the majority of the features listed above. These features would cost more that the $50 if implemented independantly so it is a win/win for every one.
 
Back
Top