Working without a sales outlet, a way of reducing investment and fixed costs while boosting productivity
Real estate agency, online real estate agency, real estate diagnostics, construction or finance brokers, IT assistance and troubleshooting, business consultancy… Franchise concepts that can be operated without dedicated premises and from home are emerging in a variety of sectors, particularly in business and personal services. But for such a business to work, you need to focus on communication and be ready to canvass customers.
« Alone at home, I have the satisfaction of moving forward with much greater productivity, » enthuses Jimmy Béteau. In one hour from home, I can do the work I do in three hours in a coworking space. » Based in the suburbs of Toulouse, he launched his business coaching business with the American network ActionCoach in May 2010. Having converted a room into a dedicated office, Jimmy Béteau set up in his own home. « This way, I’m not bothered by family life or household noises. » Raison Home, a company specializing in made-to-measure interior design projects, developed as a franchise in 2000, is proud to have only franchisees who work from home. With greater freedom of action, they can be more agile, » says Jean-Charles Pédrono, the company’s head of development, training and satisfaction. If they feel like playing a round of golf on Thursday afternoon, or visiting a customer in the evening, they are free to organize their working hours as they wish. »
Low installation and management costs
Beyond these issues of agility and productivity, franchising is also, and above all, a way of cutting costs. « It was a way of optimizing the set-up of my business, for reasons of practicality, cost and time savings, » justifies Jimmy Béteau. It’s cheaper than renting or buying premises. » The financial benefits of home-based franchising are also the primary motivation. « There’s no investment in the commercial location: no rent, no insurance, no upgrading to standards, no decoration, no stock. And management costs are reduced to a minimum. This means you can distribute the margin more comfortably, » explains Michel Kahn, head of Michel Kahn Consultants and President of Iref (the federation of European partnership and franchise networks). As franchisees are spared the cost of the key money, the commercial lease, the fitting-out and all related installation costs, the concept is made much more accessible by minimal operating costs and higher monthly profitability. « Franchisees have fewer expenses, so less need for cash flow, and ultimately less pressure, » emphasizes Jean-Charles Pédrono.
« Home-based franchising allows you to get started while limiting fixed costs », confirms Jimmy Béteau. A good example is Raison Home, which requires an initial investment of between €10,000 and €15,000 for a total investment of €60,000, compared with €50,000 for a total investment of €350,000 for Mobalpa, which also offers made-to-measure fixtures and fittings.
Another positive point is the time saved. Operating as a home-based franchisee means you can get up and running faster, save time finding premises and bringing them into line with the brand’s standards and colors, and save on travel time. Jimmy Béteau praises this convenience: « Living in the middle of the countryside, I can work efficiently within five minutes of my breakfast. And if I need to check something in my work on my own time, I can access it easily. »
Developing his visibility
On a day-to-day basis, most of his work is done from home – Jimmy Béteau was in the habit of coaching his customers via Zoom long before covid. « I’m very comfortable working remotely, » he confides. However, the widespread use of remote working has « opened certain doors » for him. « I’ve found myself with a more abundant target market, with heads of very small and medium-sized businesses who have started to use digital tools. If customers don’t need to travel, it’s more convenient for them », he insists. David Borgel, founder of the Franchise Me Up consultancy, agrees: « Videoconferencing has transformed the world of customer relations. Rather than driving across town to see a customer, we now prefer to go digital. While it’s no more difficult to find customers without premises, you still have to go to them. Since they don’t have the immediate marketing effect of a fixed point of sale that people walk past every day, franchisees have all the more reason to prospect, canvass in the field, and develop their relationships and visibility.
Jimmy Béteau explains that he spends half his time on the road to maintain his network, make himself known, prospect for new customers and develop ActionCoach’s reputation. In particular, he looks after several groups at BNI (Business Network International), which specializes in business referrals. « I’ve joined various associations such as BNI or the Dirigeants commerciaux de France federation, to meet business leaders, and I take part in as many collective activities, events or awards ceremonies as possible. » He has also joined professional groups – CPME and CJD – to meet other business leaders. The aim? To open doors and initiate relationships that will eventually lead to commercial contracts. « If a manager receives a letter from a stranger, that message is not going to trigger a coaching mission, » he explains.
Invaluable professional networks
The franchisee also develops partnerships and sponsorships with other companies who have the same customers but not the same activities, to launch discovery workshops and themed conferences and introduce people to business coaching. To compensate for the absence of a physical branch, Raison Home (120 franchisees) confirms that it is necessary to be very present in professional networks and to take part in institutional meetings. Its franchisees take part in business aperitifs in town halls. »We need franchisees who like to reach out to others! Our franchisees need to be well known and recognized in their sector, particularly among shopkeepers in their town, who are good influencers. » In addition to investing heavily in social networks, the brand relies heavily on referrals and sponsorships. « Eight out of ten projects come from recommendations or prescriptions, because we place great importance on customer satisfaction, » maintains Jean-Charles Pédrono. Rather than waiting in a branch for the customer to come to them, the network’s franchisees go out to meet future customers and use their free time to prospect. This is how Claude Raison, the originator of the concept, started out, having left his store to go and meet customers. Caught between his store and his customers, he decided in the 1990s to close his outlet so that he would no longer have to deal with opening hours and would be free to go to the customer’s home, » explains the development manager. Since we operate on a referral basis, we don’t need as many new customers knocking on our door. In our opinion, this is the best way to do our business. »
A nomadic franchise
Another advantage of going directly to customers’ homes is « being able to create enchantment and propose projects that go beyond their expectations. When you’re in a store, that’s impossible. You have to go to the customer’s home, see how they live and understand their needs and constraints. You’re immersed in the customer’s world, and they trust you, » says Jean-Charles Pédrono. David Borgel confirms the need to meet customers: « In many professions, face-to-face contact is very important. Individuals are sensitive to this, as the information provided seems more accurate, more real and of better quality than with a remote service ».
This is borne out by the creation of mobile franchises such as Ecowash, a network of automotive services including ecological and sustainable car washes for businesses and at home, or Relaxauto, which offers in-home car maintenance and repair. « They no longer have garages, but only fully-equipped mobile trucks that go to customers’ homes, » continues David Borgel. Nomadic franchising means you can start up without a fixed point of sale, but with a simple mobile unit, such as a truck or bicycle, and therefore a minimal initial investment.
The advantage? The ability to position yourself where the market is and where the customer is. « Having mobile units costs a lot less and allows us to convey the brand in the commercial landscape, thus making ourselves known, creating leverage effects in terms of communication and indirect visibility. This continuous advertising action capitalizes on the brand seven times faster than a physical point of sale », estimates Michel Kahn. This principle avoids direct competition with counterparts. The model generates unique positioning thanks to different, innovative and, by definition, scalable concepts.
In the same way, these networks help their franchisees to develop their customer base. Ecowash, for example, provides them with a permanent call center and marketing tools for customer acquisition, and secures part of their sales through key accounts and national contracts. Last but not least, the fact that the company has no street presence needs to be offset by a maximum of communication on the Internet and social networks to reassure potential customers. « It’s better to have a good communications budget than poorly-placed premises. If they invest even a quarter of the cost of rent in online communication – Google Adwords or any other lead-acquisition technique – they’ll be almost certain to get the same result as if they had a point of sale, » concludes David Borgel.
Charlotte de Saintignon
Le Nouvel Économiste, 24/08/2023