The business of Valpak Direct Marketing Systems Inc. of Largo, Fla., all started on paper more than four decades ago and has now transitioned into a combination of online and offline worlds. Businesses still pay Valpak to print and distribute coupons to consumers in the familiar blue direct-mail envelopes. But today they also count on Valpak to make coupons available through its website and other digital media.
And it's gone far beyond that, says Kevin Drudge, manager of new franchise development. "We have recently enabled a mobile version of the site, as well as apps for the iPhone and iPod touch, Android, and Palm Pre platforms. We want to be everywhere our customers are looking for savings --in the mailbox, online, and on mobile --in ways that offer benefits for our consumers and advertisers."
Valpak has 175 North American franchisees. "In 2010," says Drudge, "we are focused on building on our core business with our franchisees, expanding our Canadian footprint, and developing, testing, and launching new digital products to the franchise network."
Coupons, training, and office help may be deliverable online, but haircuts? Not yet. Even bricks-dependent franchisers such as Regis Corporation of Minneapolis, Minn., parent of Supercuts and other concepts, do employ the Internet to communicate with franchisees and consumers. But one appeal of bricks-only opportunities is that they aren't vulnerable to the latest innovations, points out Alan Storry, vice president of franchise development.
"The industry is rock-solid and recession-resistant, "Storry says" We don't have to worry about technological obsolescence." Regis has over 12,900 locations worldwide, including around 4,000 franchise locations, with opportunities targeting different consumers and pricepoints. Storry says having all these concepts lets franchisees tap new consumers without having to grow geographically.
In 2010, Storry looks for franchise unit growth from Raze, a year-old upscale men's barbershop concept, and Cool Cuts 4 Kids, which aims to hit younger consumers. "We're looking at aggressive plans to grow all our brands," he says.
Within the hair industry are many niches and one of the most significant is occupied by Fantastic Sams Hair Salons. Jeff Sturgis, vice president for franchise development of the Beverly, Mass., company says their salons appeal to customers in search of a full range of hair care services, including cuts, colors and perms, at prices undercutting boutique salons.
For franchisees, Fantastic Sams offers an opportunity that requires only a flat royalty fee."That means as your business grows you're not paying more to us, which means your fee actually goes down as a percentage of sales,"Sturgis says.
With 1,300 current locations, Sturgis says they'll add 50 to 70 salons in 2010. They'll also address personal care trends. "Hair straightening, for example, has become a fairly popular service in the last year or two, so we've been providing a lot of technical information to make sure we can take care of customers looking for that service," he says.
With online-only, bricks-only and various blends to choose from, where does that leave the franchises that commonly feature lower investments than physical storefronts, but not as much Internet presence as pure click concepts. Actually, in pretty good shape.
Dennis Jarrett, CEO of Stratus Building Solutions of St.Louis, Mo., has grown the cleaning and building maintenance franchise to more than 4,000 locations since beginning in 2005. Green is the differentiator with Stratus. The company employs its own environmentally-preferable formulations for cleaning agents, and generally emphasizes a green approach in all it does. "That's the reason we've grown in leaps and bounds on the account side,"says Jarrett."Everybody wants to do their bit for the environment."
Stratus franchisees typically have a have small office. "But the Internet really drives our brand, our leads and our awareness," Jarrett says. Master franchisees often come from senior-level corporate backgrounds and are interested in growing multiple-unit franchises quickly, Jarrett says.
The same goes for the parent."We hope to be able to open another 20 master locations in the US. And double our unit franchise footprint,going from 4,000 to 8,000,"Jarrett says."We also hope to get into another six countries."
That kind of growth would put a smile on any entrepreneur and, with the help of WhiteScience Worldwide, that smile would be brilliantly white. The Roswell, Ga., company has established almost 1,000 accounts in establishments such as Caesars Palace, Hyatt hotels, and Ulta retail stores as well as cruise ships and shopping malls. Their new Whitening on Wheels (WOW) concept already has close to 100 representatives in the first few months, says President George Nelson.
WOW representatives operating in semi-protected territories buy WhiteScience's dental whitening product and equipment and resell product and services to spas, salons, and similar businesses, where customers will achieve an end result superior to over-the-counter products, at a fraction of the price dentists charge.
WhiteScience is growing rapidly in Israel, England, Italy, Croatia, South America and the Caribbean islands, Nelson says."The beauty of this business is you don't have to invest in brick and mortar and rent,"says Nelson."But it's not purely Internet. It's a hybrid."
The same could be said of franchising in general today, where few if any businesses operate completely off-line. For franchises trying to choose between a concept relying on a homepage or one with a physical storefront, the answer to the question "Bricks or clicks?" is increasingly, "Both."
