Security 101 touts franchise model

Looks to national accounts for growth
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Wednesday, August 8, 2012

WEST PALM BEACH, Fla.—Since launching as a franchise-model commercial security company here in 2007, Security 101 has grown to include 26 locations today.
 
With an overall count of 340 employees currently, the company is moving along toward its goal of having 101 franchises, Steve Crespo, Security 101 president, told Security Systems News. And Crespo is looking to the company's national accounts program to contribute in a big way to that growth.
 
Security 101 does not release revenue figures but Crespo said over the past three years, revenues have increased nearly 50 percent each year. Two main drivers are the commitments from the franchise owners and Security 101’s national accounts program, which has been in existence for four years, but was formalized in 2010 when Tom Echols came on board to run the program.
 
“Today our national account business represents about 15 to 20 percent of our total revenues,” Crespo said. “I believe as the company grows in locations, national accounts can grow to be as large as 30 to 40 percent of total revenues in a five-year range.”
 
The national accounts team is made up of 14 full-time people, four of whom are “embedded techs who reside within the walls of strategic national account customers.”
 
Crespo said Security 101’s national accounts customers are Fortune 500-type companies. He believes that his company’s franchise model is superior to other providers, such as large publicly traded security companies with a national footprint, or “traditional networks [of independent integrators who work together to provide national accounts service] that you see in the industry.”
 
As opposed to a large national company, where branch offices take care of national accounts customers, at Security 101, “it isn’t a general manager or branch manager [who’s in charge], it’s the owner of the local franchise,” Crespo said. National accounts customers “love that their regional managers can work with owners who have decision-making powers and have a genuine vested interest in helping them.”
 
Security 101 has advantages over groups of independent integrators as well, Crespo said. For one, all Security 101 franchises use the same products and they’re factory authorized and certified on those product lines, he said.
 
In addition, all of the franchises have been trained the same way and use the same processes.  “Whether the franchise is in Fort Lauderdale, Salt Lake City or New York City, they all follow the same processes,” Crespo said. And they all work on the same software platform, a proprietary program developed inhouse called “101 Ware,” which Crespo described as “much more than a CRM, it’s a proposal writer, a project management [tool], a customer portal.”
 
The software program means that there’s no question which office does the billing for a national accounts customer service call, for example, because it’s all centralized. Also, a client can look in on a project that’s underway or check on a service call. “From proposals, to projects to service… the customer has full visibility to what we’re doing. They can go online 24/7 with a passcode and see a nationalized picture or a localized picture,” he said.
 
Is it hard to become a franchisee? “I regretfully had to turn down two potential franchisees this week,” Crespo said. Qualified franchise owners come from two different groups: industry insiders who’ve worked for someone else and are ready to start their own business, or people who know how to run a business, but don’t know the security industry. Those people tend to come from an IT background, Crespo said.
 
As long as they have aptitude for technology, are financially able to own a business and have leadership qualities, either category of owner can be trained to run a successful Security 101 franchise. If they’re a married person, however, they must have spousal approval. “The spouse’s 100-percent commitment is as important as anything else,” Crespo said.
 
Once approved, franchise owners do five weeks of “pre-season training”: two here in West Palm Beach at Security 101’s national training center, and three weeks at the franchise location. The training includes everything from business controls, sales, marketing, products, 101 Ware, and project management. After the initial five weeks, every franchise has a calendar of mandatory training on a variety of topics, for example there is yearly manufacturer product training that must be completed.
 
Where will Security 101’s new franchises be? “We have a strong focus on the West Coast right now,” Crespo said. “We want to put stars on our [locations] map in California, Washington and Colorado … We’ll have a lot more national business [opportunities with those markets added] because we’ll have true national coverage.”

Comments

I'm sure that Security 101 will allow a local company to become a franchise if the company in question brings strategic accounts with it.  I wonder how much of the local percentage of sales goes towards Franchise Fees, and how the local company can compete with other local integrators and still be profitable after accounting for those fees?

Just curious....

NorradPro, a small family owned and operated security firm located in the Boston Massachusetts area launched a project tracking database earlier this year. Clients are able to log-in and track the progress of contracted services.

Independent organizations will always have a higher likelihood of discovering and implementing innovative processes.

Franchises may have financial backing, but are they capable of keeping pace with the evolving requirements of their clients?