How do you take a small idea and turn it into the next big thing in digital marketing? Ask Don McQuaid, owner of RTown Communications, and he'll tell you it's all about thinking big.
“If I wanted a calm life, I guess I would have just run the business [in a small way],” he said. “I could have easily just tucked in and run in five or six markets corporately, but that's just not my idea. I think this thing needs to be in 300 markets.”
RTown has been recognized by a number of chambers of commerce as best new business and most innovative business. McQuaid gave a simple example showcasing why.
“If [a tour company] has two seats left on a two o'clock sightseeing flight, in the past they would fax that information to one of the hotel concierges and hope that the agent would be able to sell the package to a guest.”
With RTown, businesses can input their offers onto a custom template on the RTown website, and the ad is immediately distributed to thousands of hotel rooms, to digital screens in community stores, and, in the near future, said McQuaid, they will also ping to anyone with a mobile phone who has signed up for the app that allows them access to the information.
Asked what made him think the business had what it takes to grow under a franchise model, his answer underlines the fact that he didn't just jump blindly in.
“I had looked at all the options and I knew I wanted to grow my business,” he said. “I'm really passionately excited about it and I think it's the future. It's a new media model. It's a game changer.”
When he realized the business potential he had what he called his “aha” moment.
“It's all about scalability,” he said. “You have to convince yourself that your business will scale successfully.”
Duly convinced, he decided to rebuild the business based on a franchise model.
RTown is now running in 12 markets and counting, including locations in the Bahamas. They broadcast into more than 45,000 hotel rooms and 570 digital signs across Canada, in areas such as Whistler, Banff, Mont Tremblant, Kelowna, Vernon, Tofino and, most recently, the Vancouver Hotel Network.
It's the stuff Doug Anderson, owner of DA Top Talent, looks for when advising clients on growing their businesses.
“You need to have something unique,” he said. “To be the seventh major hamburger restaurant may be difficult to do.”
Franchise entrepreneurs need to be very creative, often fearless individuals, said Anderson, who has worked with hundreds of new and growing businesses.
“A franchisor usually has much better business acumen, deeper pockets, the ability to tolerate risk in pursuit of growth and a fearlessness to pour every dollar back into the business in the belief that that is the best investment they can make with their own capital,” he said. “[These are] the usual characteristics of a franchise that's growing.”
That's not to say, however, that the risk always pays off in the franchise marketplace. For those looking to purchase a franchise, Anderson warned of predatory franchisors, some of which he's also come across and consequently walked away from.
“Franchisors who are predatory, come in prepared for litigation and have a war chest with their lawyers, account for perhaps 20% of the market,” he said.
They can structure the franchise such that it's virtually impossible for the franchisee to make money or they charge high royalty fees so that at the end of the month, franchisees are lucky if they can cover costs. They may overcharge for the materials and equipment required in running the franchise.
Selling the franchise can be very difficult as well, because the franchisor can retain the power to either approve or deny a given purchaser.
Anderson has seen it before.
“There are some people out there who have lost their shirt,” he said, warning that the marketplace is sometimes sugarcoated.
In his view, however, there's no doubt the opportunities exist for those with a niche product or service that nobody else is offering and that is difficult to duplicate.
“As a franchisor, that's really where the magic is.”
