04/ 01/ 2005
by Lonnie Helgerson
Making major changes to your business requires planning, foresight—and guts, especially when you must sell the idea to others in your business. But after renaming his business and revamping his strategy three years ago, one franchisor looks back and wishes he’d done it a long time ago
In 2001, my then 9-year-old company had 70 franchisees with 160 retail stores either under contract or in development. Sounds successful, right? At the time, maybe. But looking forward, I saw our success wasn’t sustainable. Ninety percent of the customers who visited our retail storefronts each month to purchase computer equipment were brand new. Something had to change. We had to find a way to grow an established customer base.
Radical change was the only answer. I began by renaming the business to give current customers (and those we hoped to gain) a better understanding of what we do. I also revamped our business strategy, moving more toward a service-based business. When the dust settled, 10 of my 70 franchisees remained.
I founded Computer Doctor in 1992 and began franchising in 1996 with a retail storefront concept focused on offering computer sales, service and equipment to individuals and businesses. While consumers embraced the name and concept, I always wondered whether Computer Doctor was too casual of a name for the business-to-business customers we hoped to gain.
I got my answer quickly, the decision brought on by the ever-changing world of technology. After the boom times of the early and mid-1990s, everyone in the computer industry was struggling with storefront retail sales, so we decided to cease storefront operations and begin offering mobile on-site technology services to both consumers and businesses.
To coincide with our new approach, we needed a name that really conveyed what we did. I came up with Expetec by combining “expedited” and “technicians,” because it captured the idea of providing professional and efficient technical service to our customers.
We not only had a new name, but it reflected a new culture. Suddenly, we had companies and vendors calling us that had never contacted us before. But we also realized that a great many of our franchisees weren’t going to be willing to change with us, because they feared cutting out retail traffic would kill their businesses.
Making the decision to change our name and strategy wasn’t a tough decision, but it was a tough decision to stick with it. I never wavered, even though I realized the decision might cause irreparable damage.
When we became Expetec Technology Services, I offered our franchisees the opportunity to be released from their agreements if they didn’t want to work within the new model. That wasn’t the right approach. In deciding to forge ahead with Expetec, I should have been resolute in selling the new model to franchisees and making sure they remained in the system. It’s one decision I regret and why we were almost forced to start from scratch in rebuilding our system of franchisees.
For those franchisees that remained, improved results were almost instantaneous. Without having to depend on storefront operations, their expenses went down considerably as they began offering new and profitable services. They also built recurring revenue streams, something that wasn’t possible under Computer Doctor.
Today, our business is better suited for the future. Yet unfortunately, not everyone bought into the idea along the way. I lost many good relationships with franchisees as a result of my decision. It was difficult, but my feelings are captured in the words that appear during the opening of Donald Trump’s “The Apprentice”: “It’s nothing personal. It’s just business.”
Lonnie Helgerson, CFE, is the founder and chief executive officer of Expetec Technology Services.
