The Computer market franchise plugging in to information technology

The Computer Market franchise intends to consolidate its position as the largest retailer of ex-Government and ex-lease computers, with a plan to double in size in the next 12 months with 10 stores by the end of 2006.

Eight years ago, school-mate founders Kurt Kratzmann and John Ferrett identified a gap between the specification of a new computer and the real needs of the general community. They established a store selling second hand computers, updated with the latest applications for business and personal use.

“All of a sudden buying a second computer, a laptop for travelling staff, or for a home office or child became affordable,” said Kratzmann.

“We have found that a lot of people want to use a computer for the internet, word processing or for spreadsheets. By reformatting the computers, adding a modem and a DVD they have exactly what they need.”

With four years experience behind them and three stores, Kratzmann and Ferrett identified franchising as a way to grow the business to meet the increasing availability of used computers and the increasing consumer demand for them.

“We decided that it was the best model for expansion and that growing organically would be too slow for the market and not fast enough to capitalize on the relationships we were able to cultivate through the initial three stores,” said Ferrett.

Both agree it has been a long road from deciding that franchising was a good expansion model to selling the first store, but they are yet to find a downside to their new business model.

“We undertook extensive research and garnered advice from a variety of people before we even thought about selling a store,” said Kratzmann.

“It was a four year learning curve that has only recently come to fruition and we are now learning a lot more as franchisors. The biggest challenge has been the loss of control.”

Mr Ferrett agrees but says that the skills and knowledge brought to the business by some of the new owners has been eye-opening.

“We’re very fortunate that we have had great people come into the business and that our stores are now able to provide much better customer service as a result of individual owners operating each store. Our new franchisees are much closer to the customers and have a far more hands-on approach than we could hope to have achieved from Head Office.

“Our industry is very support-intensive and after-sales service is much better in a model that supports close contact with customers.”

Like many franchise systems, franchisees of The Computer Market do not need particular knowledge of the product but are most likely to succeed if they have a strong business background.

“IT experience can be employed relatively easily, so it’s far more important that franchisees have some entrepreneurial flair and business acumen,” says Ferrett.

“So far we have a retired franchisor, a husband and wife team and a bookkeeper as our franchisees. IT can be delegated to the IT experts so I expect we’ll see plenty more variety in the background of our growing franchisee community.”

Ferrett and Kratzmann decided it was important that the company retain one store to keep in contact with the market and what franchisees are experiencing; hence the company’s headquarters and retail outlet are combined in a new purpose-built showroom at Albion.

“We have adjusted to a more advisory capacity since becoming franchisors,” says Kratzmann.

“For our franchisees we need to focus on the big picture; expansion, brand awareness and supplier relationships as well as advising them on how to handle day-to-day issues that arise.”

“Our time is certainly divided differently than it was before we franchised but we’re enjoying how that adjustment is helping us realise our goals of expansion and market leadership.”

Kratzmann said the company has marketed its products through print advertising in Brisbane and television, radio and print advertising in regional markets.

The Computer Market is currently located at Albion, Springwood, Strathpine, Toowoomba and the Gold Coast and is a member of the Franchising Council of Australia (FCA).

The Computer Market franchise costs between $275,000 and $375,000 including initial stock.

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