Rise of the franchise?
CINCINNATI, Ohio--In a model relatively new to the security industry, MonitorClosely.com has established a franchise network, totaling 53 franchisees by May of 2007, that provides IP-based video surveillance services for small businesses. Franchisees sell surveillance systems, put the order in to MonitorClosely.com's corporate offices, receive a Geovision system of cameras and a DVR, then subcontract the labor to a local electrician or security installer. The systems are self-monitored by the customer through a web interface provided by MonitorClosely.com.
"The systems aren't that complex," said MonitorClosely.com's marketing director Denise Donohue. "The installation is done by a third-party vendor. What we offer is all the systems we've developed, including 24-hour tech support. We can access the systems remotely. We can log in and make sure all the settings are proper."
Donohue said some franchisees, who often run their businesses as one-person sales operations, come from technical or law-enforcement backgrounds, "but the primary function of the franchisee is the sales capacity. If they haven't had a security background before, they become pretty educated in the industry quickly." This makes them very price-competitive, as there is no inventory, no insurance for installation work, no employees--virtually no overhead.
Ken Cyll owns the franchise serving Portland, Maine, and began selling systems in February. He comes from a corporate background and was "looking to do something different, looking at buying a business ... and I was looking for a technical business." He was close to buying a security installation company in Maine, but saw that the owner's departure would mean the departure of much of the installation talent, "so I walked away from it."
Cyll saw the ad for MonitorClosely.com in Entrepreneur not long after and was attracted to both the business model and the industry. "I know there's a market for this business. You see surveillance cameras everywhere," he said. However, "I'm not doing as well as I originally projected, which is no surprise to anybody." His low price-point actually seems to sometimes work against him, as customers assume it's the same as similarly priced consumer systems.
"I just did a quote for a customer up in Cumberland," he said, "and they were very suspicious, worried the price meant they'd get something below par. But I demonstrated it for them and they were very happy. I think they're going to buy."