Alexandria, Va - 9 May, 2005 -

If your idea of owning a franchise stops with a McDonald's or Subway outlet, think again. Technology is changing what it means to be a franchisee. "Franchising used to be all about fast food, lodging and cleaning carpets. But it's more high tech now," said Dick Rennick, chairman of the International Franchise Association trade group. "Franchising now includes people who can do more complex things like resurfacing driveways or repairing ink-jet cartridges. It's becoming more diverse and continues to grow in numbers." Franchise owners say the trend's fed by several developments. One is that new technologies like the Internet and wireless communication are carving out new business niches. Some consumers, for example, need special help in using computers and other digital gear. Advances like digital sensors and monitors also help franchises get involved in complex security and repair services. And small, locally owned franchises can provide a "human touch" that's different from the customer service offered by bigger companies. A case in point is 48-year-old Ellen Radigan, the owner of a franchise store called Snappy Auctions in Alexandria, Va., that helps consumers sell items on eBay. Radigan once worked for a big telecom company in customer service and says she was "aghast" at how customers were treated. "To me (franchising) meant being able to take care of people and have control over my level of service. I don't have a (corporation over me) saying, 'You can't do that.' It's my decision." The folks that sell franchises to the public these days also didn't come out of the burger business. Rennick, a former cop, runs his own franchising business, the Palm Springs, Calif.-based American Leak Detection. The nationwide operation trains and equips people to offer a high-tech, leak-finding service at customers' homes and businesses. Franchisees pinpoint pipe and sewer leaks using advanced electronic equipment. Debbie Gordon is a former tech consultant in Nashville, Tenn., who founded Snappy Auctions, the franchise that Radigan bought into. Gordon began selling items like shoes on eBay five years ago. That led her to the concept behind Snappy Auctions. Her franchise trains people in the U.S. and overseas to set up eBay drop-off stores that handle shipments to successful bidders and facilitate payments for items. Then there's Joe Barbat, founder and CEO of Wireless Toyz, a cellular service store that pulls together equipment and service plan information from major wireless carriers to provide one-stop shopping for consumers. Chief Operating Officer Richard Simtob says the idea of franchising grew out of several successful one-stop telecom/wireless stores that Barbat ran. Rennick got the idea for his American Leak Detection franchise after taking over his late father's plumbing business. Rennick had helped out from an early age. "I was the guy that went out with the sledgehammer and a chisel to find the leak for my father," he said. As someone who did leak detection the old-fashioned way, Rennick grasped that new technology like heat detectors and miniature cameras could make the process faster and more efficient. So 30 years ago, he founded a company that used high-tech gadgets to detect leaks. He started franchising the business 20 years ago. American Leak Detection now has about 300 franchised locations in 44 states and a dozen overseas, including in Brazil, Australia and South Korea. Franchisees deal with anything from swimming pool leaks to bigger jobs at nuclear power plants and factories. They also find leaks in concealed or underground piping systems carrying liquids or gas. In addition to using tiny cameras that resemble those used in surgery, Rennick's specialists are trained to don wet suits to do underwater inspections of large holding tanks and other facilities. Snappy Auctions started from Gordon's passion for shoes. She bought shoes at discounters and resold them on eBay for a profit. It was more like a hobby than a business. As Gordon became adept at the fine points of online auctioneering, friends asked her to help them sell things on eBay. "The people who asked me for help were tech-savvy people. But they were busy. They didn't want to spend a lot of time doing the tedious things that are part of the auction process," Gordon recalled. That was when she realized there was a market for helping people sell things on eBay. She came up with a business plan, made an agreement with eBay and opened her first store in Nashville in October. Gordon decided to develop the business as a franchise after realizing that customer service was the key to the business' success. "That's because franchise owners would be (more sensitive) in serving customers, when compared with a corporate model," she said. Snappy Auctions has sold over 60 franchises in the U.S. the past year. It plans to open franchises in Britain, Japan and other parts of Asia later this year. Individual franchise stores take anywhere from 15%-35% from the proceeds of a sale as a commission. Each store pays Snappy Auctions a royalty no higher than 4% of its sales. Snappy Auctions' training involves product evaluation, marketing, advertising, software instruction and lessons on selling via eBay. Franchises get protected territory. "We also focus on how to provide customer service, and we do on-site training and work with employees on running the stores," Gordon said. Wireless Toyz opened its first franchise in September 2001 in Garden City, Mich. It now has 79 franchises in various states and another 127 ready to open over the next year. In addition to providing one-stop shopping for cell phones and service, it offers satellite TV service from suppliers like DirecTV and Dish Network. The upfront cost for a franchise is $250,000. This includes inventory, fixtures, equipment and training. "The type of people who buy our franchise love retail, want to be in a store 12 hours a day and they love technology," said the firm's chief operating officer, Richard Simtob. Simtob says Wireless Toyz helps franchisees pick the right location, negotiate a store site and assists with the design and layout. It also helps with the grand opening and sends staff to advise franchisees. Simtob says average store revenue is $900,000 a year, with the entire franchise network pulling in $71 million in sales annually.

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