A franchisee business model for local media has taken off in Indiana and Kentucky by replicating efficiencies typically available only to large corporations, panelists told the audience at a recent Editor and Publisher Sponsored Webinar.
The panelists included franchisor Tom Britt of Towne Post Network; Josh Brown, a partner in Taft Law and host of the “Franchise Euphoria” podcast; and two franchisees, Brandon Baltz and Darren Boston, who own six of the 18 hyper-local glossy magazines in the Network.
While small, the magazines have big margins. The average annual gross revenue per publication according to legally required reporting, is $248,640, but the average profit is $114,798 with a network high of $233,992.
Britt said he is reaching out to future publishers, to expand the network, currently composed of ten franchisees.
So how does the franchise model work? Franchise owners are first and foremost the top salesperson. “Publishers are the mayor of their town. They are the face of the publication,” Britt says.
Towne Post provides back office services that include billing, paying contractors, production, printing, free mailed circulation, posting stories to websites, and even digital services such as building websites and programmatic advertising for local businesses.
Towne Post also hires and on-boards local writers and photographers who are all freelancers, and edits the copy. Publishers still come up with the story ideas but don’t see the editorial again until the proofing stage.
“My phone and email are off the hook with more story suggestions than I know what to do with,” Boston said. “But if I had to interview and write it up I’d run away.”
The magazines are mailed free monthly to a purchased list of 10,000 to 20,000 homes in each territory with 1000 to 2000 copies reserved for publishers to distribute at coffee shops, libraries, Chambers of Commerce, and other high-traffic locations.
“It can be a way out of the corporate world if someone is good at sales and doesn’t want to start from scratch,” Britt said.
“We can launch a magazine in ten weeks. That’s impossible to do piece-meal on your own.”
The most important quality he looks for in a new publisher is a passion for sales.
Boston and Baltz are cases in point, both had a strong background in sales, but no interest in handling the details of accounting and production.
Boston had sold advertising for a living in the past and was a Towne Post advertiser when he decided to buy a franchise.
“I’ve been in sales for 25 years, it's the best product I’ve ever sold. People love it.”
Baltz’s background included sales for Comcast and Valpak, where he traveled for work as a corporate trainer.
For both, it was important to own their own time and keep more of the profits.
“Now I’m putting most of the money in my own pocket,” Boston said “I don’t think I have a desire to ever work for someone again.”
Baltz is no longer “on the road” during the week, so he spends more time with his son. The family was also able to buy a cabin and spend long weekends there.
The network charges $35,000 for a franchise, which Baltz made back in a few months, plus a royalty that is a percentage of revenues.
Initially, Britt, who has a background in magazine production, licensed his software along with services to other publishers. He was reluctant to adopt a pure franchise model because he associated that with big national chains.
“If there is a KFC and Joe’s dinner on the corner, KFC is corporate, Joe’s Diner is not.”
Today, he thinks Towne Post’s magazines are actually more local than corporate-owned media because the local publishers are all owners and the money spent by advertisers stays in the community.
He is interested in talking to community publishers who may convert to a franchise model for the savings, access to turnkey digital services, and an easier exit strategy.
“I like to work with peers, not employees,” Britt said. “We are all owners. We are all at the same level.”
Financial data is transparent and viewable across the network, and franchisees meet to share ideas, such as a now uber-profitable relocation guide with an overrun distributed monthly to a purchased list of new arrivals.
“It’s the wonderful thing about being part of a group, Blatz said.
Learn more about franchising at: Franchising.TownePost.com
Partner Taft Law
Host of "Franchise Euphoria” Podcast
Avon, Brownsburg, and Plainfield Magazines
Noblesville, Westfield & Boone County Magazine
CEO /FounderTowne Post Network, Inc.
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