White Collar Franchises and territories: ​So you are ditching corporate life and going out into a consulting franchise ……..

Published in Franchise Buyer Magazine, Vol3. #3, August 2016

Many white collar business people give the corporate life the flick (either voluntary or involuntary), and decide to put their skills to work in a small business for themselves. I personally did that aged 44, with 2 kids in private school etc etc ,and went into our own small consulting firm – a fairly high risk period of my life!

Whilst this article is not about me, I did end up being a Director of the Institute of Management Consulting (IMC) for 6 years, so do have some idea of the challenges before you. Taking on a white collar franchise can be the solution between going alone, with all the risk as an individual consultant, and partnering with a known concept, and using the systems and processes already established to your benefit.

You probably don’t want to do manual jobs,(lawn mowing, pool cleaning, dog washing etc), and feel your many skills and qualifications should lend to do a more sedate white collar franchise business, using brains not brawn – so what is out there for you?
 
We are seeing a high growth in white collar service franchises, and we are working with quite a few what I would describe as Professional Services – such as book keeping, business coaching  and financial planning, which we describe as B2B, and then the professional, medically related services such as Myotherapy, Chiropractic and  Physiotherapy businesses. 
 
The question normally comes up in discussions with the Franchisor – “Do we have a territory to work in, or some form of geographic protection”?
 
The options that arise are normally:

1. Open Slather – you are all equal and nothing is off limits
2. Preferred Marketing Areas – The Franchisor allocates you a Marketing Area to allow them to fairly allocate leads. You market within your area only but other than that, you can head where you find the jobs.
3. Hard walled territories - We give you a territory, and ask you to stay within it.

 
Whilst the Type A personalities love the idea of being able to hunt and roam at will, reality normally comes that if they can do that in everyone else’s back yard – similar will be happening to them. Having a business full of active predators can cause many issues, and I hear from the Mortgage Broking franchises, the major disputes they have are normally between the Alpha Males!
 
Our recommendation is normally the Preferred Marketing Areas (PMA’s) where you have some respect amongst the franchisees, and have a basic agreement you ACTIVELY market across your own nominated area, however you may PASSIVELY perform (do work) outside your area if you are invited to do a job (by a customer). The big NO NO is you cannot ACTIVELY market outside your own PMA. (Active marketing is thought of as cold calls, phone calls and advertisements / billboards or dropping leaflets into mailboxes).
 
If we agree to a PMA arrangement, how do we measure each area / postcode for business potential?
 
We recommend a process we call Units of Demand for B2B business, whereby each area (normally postcode) is assessed in terms of:

• Number of businesses in each area, weighted for how suitable they are for the service you provide
• Size of businesses – as certain size may suit what you are providing..

 
For example if you are a Bookkeeping service franchise, the ideal business is probably in the range 5 – 20 employees, because businesses larger than that have their own CFO / Bookkeeper internally, and your services are not needed.
 
The Australian Bureau of Statistics makes available a dataset giving us the type of business (ANZSIC Categories) and the size of business (range of employees) for all areas in Australia, and we arrange this into Postcodes, as we normally find these are the best area units to work with.
 
The aim of doing Territory Planning is to them make each Territory / PMA of similar opportunity for the Franchisees, based on facts and data, not the wet finger in the air approach.
 
If you are looking to go into a Professional Services Franchise, make sure there is some protection for you in the territory you are securing. We suggest the PMA model is normally the best, with a logical and agreed process for the Franchisor to allocate calls via the web or their Head Office or Call Centre.
 
If you wish to read more about territory planning and this specific topic, please look at the following links.
 
http://www.spectrumanalysis.com.au/uploads/3/1/8/6/31864321/units_of_demand_for_a_b2b_business.pdf
 
http://www.youblisher.com/p/1275617-FIVE-tips-to-effective-territory-planning/
 
Good luck with finding a good white collar business franchise to further extend you past corporate skills.
 
Peter Buckingham CFE

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