Craig Mitchell, co-founder and franchisor of spyware franchise, OzSpy, is the first one to admit that the launch of his company wasnÕt nearly as successful or exciting as he would have liked.

Thankfully, more than a decade later, people have become seriously desensitised to the new technologies that seem to be popping up every day, and theyÕre also more conscious of their security and privacy, so the outlook for OzSpy is much more promising, with 11 stores up and running and hopes for another nine by the end of the year.

“We launched the concept, OzSpy, about 14 years ago and we traded for about a year or two, with great difficulty actually, because we found that the Australian society wasnÕt ready for the concept.

“But after a couple of years the name started to get around and people accepted it. We went from standing around doing very little, to having nearly 10 staff in a little shop and not being able to keep up,” says Craig.

The concept that Craig believes people are now much more accepting of is spyware — everything from pens and watches with in-built cameras, to very complicated, multi-faceted home security systems.

And while most people automatically associate spyware with sleuthing, Craig says OzSpy customers are just as varied as the products he sells, including students, lawyers, tradesmen and children wanting to record personalised Youtube videos.

Craig says, “A really important part of the business is our business to business, and thatÕs anything from a handful of cameras in your local milk bar all the way up to industrial systems. We do a lot of government work and some of our clients include Queensland Rail, Dream World and Movie World.

“We also specialise in helping franchise systems with their security because weÕve got such a strong understanding of the franchise model. Then weÕve got our DIY security, and home security packages — that is very much a growing market.”

Of the existing 11 stores, nine are franchise owned, and Craig is convinced that the frachising model is the best one to ensure consistent and profitable growth.

“We always liked the idea [of franchising]. We always wanted to have a lot of stores, and we were open to the concept of franchising because it brings in fresh blood and new ideas, and I suppose, after a while, it really picks up the business. So thatÕs why we chose the franchising path,” he says.

In order to drive franchisee recruitment, OzSpy has made adjustments to stock management and store fit-out to cut the initial investment required to approximately $150,000.

“When we first did our retail fit-out it involved a lot of plastering, a lot of electrical work, and so over time weÕve found that to be a little bit of a barrier for people, so weÕve gone back and had it re-designed as a modular, clip together fit-out.

“The old fit-out, not only was it very expensive but it used to hold up the franchisee getting up and running by a couple of months. Now weÕve got the new system and that knocked $15,000 to $20,000 straight off the price,” says Craig.

OzSpy has also done a deal with AustraliaÕs key suppliers to the spyware industry, reducing its reliance on imports and cutting about $14,000 off the required stock holdings.

“And then we thought about keeping our franchisee fee in line, percentage wise, with the rest of the costs, so we dropped that a little bit. So itÕs not actually a discount. With the changes in our system and some refining, itÕs the new value.”

This new value wonÕt last too long though, Craig says, with costs likely to rise once OzSpy reaches its 20 franchise milestone.

Tech Talk

While spyware and gadgetry might seem daunting and quite niche to potential franchisees, Craig is adamant that most people will be able to get a handle of their business relatively quickly. “A lot of people are concerned with the security aspect because it sounds technical, but it really isnÕt. ItÕs probably no more technical than selling washing machines,” he says. “We handle all the branding, we handle the website, we handle a 1300 number nationally. In the last three or four years I canÕt remember a franchisee that hasnÕt broken even within the first couple of months.”

A typical day for an OzSpy franchisee would involve arriving at their shop, dealing with any emails or leads that have been sent through overnight, dealing with retail customers and possibly also going out and doing commercial quotes.

“Going back a decade or so, when everything was hand-made, a basic electronics understanding was critical but now all the installations are handled by sub-contractors, all the equipment is very similar to any electrical product, itÕs all nicely boxed, itÕs all plug and play, itÕs all very simple.

“And nowadays the average consumer is a lot more computer savvy as well, so even the support side is reduced… so we donÕt really need to worry too much about industry or electronics experience,” explains Craig.

Motivation is the key to success in any business, he adds, so the key criteria for OzSpy franchisees are a positive, can-do attitude, an understanding of business and an interest in technology. “We like people who are interested and have a bit of a passion for technology in general. But what weÕre really looking for is people who have a bit of business acumen, people who are looking for an opportunity.”