Why are independent agents more profitable than national accounts for a Countrywide Signs franchisee? Read on to learn what can be achieved by focusing on independent agents rather than relying on national accounts.
For some franchisees, an incentive to join a franchise is due to the readily available customer-base of national accounts (or centralised accounts). For those unsure what a national account is, it’s where the franchisor has already won business, or tenders for business, from a national brand. This means that the franchisor co-ordinates the needs of the national brand, negotiates rates and distributes the work between its own franchisees based on geographical location.
Sounds great doesn’t it, and for many it is a great business model. But it genuinely depends on how the process is set up and the sector the franchisor is operating in.
National account contracts terms are negotiated between customer and the franchisor. This means that the franchisee doesn’t control pricing, logistics, invoicing or service level agreements and in turn the opportunity to determine their own profit margins or client base. What seems like a quick business win, isn’t always the most profitable for the franchisee long-term. Many contract accounts are won on low margin billing, meaning the franchisee is working high volumes for low profit, often to the detriment of quality and professionalism.
Why Countrywide Signs Focuses More on Independent Agents
Gaining the business of an independent agent where there are less hoops to jump through to appoint suppliers, and where price negotiations can take place with the franchisee, definitely also has its plus sides.
As a franchisor operating for 25 years, national accounts were a large part of our offering. However, over time we realised that this wasn’t the most profitable approach for our franchisees or our franchise system. In fact, a very large national account we had a while back, meant that for the kudos of working with a well-known brand, we also had the downside that the returns didn’t provide a profit for us or our franchisees. So, we decided to take a different approach. Focus on independent agents, then regional accounts, with national accounts brought into the mix when the numbers really added up for all involved.
The Property Signage Sector Has Changed
We realised that the marketplace was changing within our sector and that even though there were many plus points for national accounts, for Countrywide Signs maybe this wasn’t the core approach for our business. As more and more independent agents and hybrid agents started popping up, we could see the benefits in moving away from national accounts and differentiating our business model by supporting franchisees with their focus on local contracts.
The change still meant we have the opportunities as a franchisor to win business for our franchisees through regional and in some cases national agents, but by giving franchisees more scope to tap into an increasing number of independent agents. Franchisees who have more control over their own pricing structure, claim back their own VAT and are not so bound by customer corporate procedures.
We adjusted our thinking and now focus on growing a network of entrepreneurs with the hunger to grow their own businesses how they would want. An opportunity where franchisees really have the chance to ‘get out’, what they put in and make their business their own.
No longer Property Sign Erectors, Now Property Signage Experts
The Countrywide Signs way changed. We restructured our head office infrastructure to accommodate the extra support required to help franchisees achieve their own goals. We invested in improving our training to incorporate more modules to cover business development, marketing, and sales. We brought in extra marketing support and now have a whole array of marketing plans and strategies which are both carried our via head office and also resources available for the franchisees. We focus on looking for ambition, business understanding and sales experience. These are the true traits of any successful business owner. The ability to erect signs can always be taught but the will to succeed in business is a different matter.
We still believe in national accounts being a part of our business model, but by not relying on them as our core business model, we concentrate our business development in areas where the franchisee has more control over their profit margins and where we can provide a support package to help them achieve their business goals.
To find out more about our business model and how to join Countrywide Signs, please schedule a call with Adam, our Business Development and Recruitment Manager or get in touch via our contact form.