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Help for the Web-Challenged: A Chain Of Site-Design and Online Hosting Shops

If franchising is a sign of an industry's vitality, Netspace may be proof that there is a ripe market for Website consulting. The new Morristown franchise of the Florida-based company, which specializes in online strategies and services for small and medium-sized businesses, began operating in September.
"What we're doing with Websites is not that different from selling consumer goods in a store," says Arthur Cooper, owner of the Morristown franchise. "We're improving the product and giving it eye-level placement."
The mass market for Web consulting is barely a decade old. In the early 1990s, most smaller companies stayed offline because few of their customers had Internet access. Many remained hesitant after the tech crash of 2000, but as Internet usage has surged in the last five years, companies are finding the Web to be an increasingly useful, often essential, resource. And where there's business activity, there's consulting.
Netspace offers consulting and Website design and hosting. It provides data backup, access to marketing technology like direct-mail software and advice based on an analysis of the client's business. Perhaps most important, it helps get client Websites more prominent listings on searches by Yahoo! and Google.
Cooper says Netspace can increase traffic to a company's Website by 40% to 50% in 90 days. "It doesn't matter if you have the Marilyn Monroe of Websites," he says. "If you're on page 5,444 of a search engine then you're not going to be found."
A Netspace bill can run from $2,000 to $200,000 depending a client's needs says Cooper, who projects $500,000 in revenues for 2006.
Netspace is hardly alone in the field. Competitors include any number of local companies as well as Massachusetts-based Molecular and fellow franchise WSI Internet Consulting and Education, based in Toronto, Canada. Major consultants like New York City-based Accenture and PricewaterhouseCoopers offer the service, too, but they target large businesses.
Headquartered near Miami, Netspace was started by Elliot Krasno, its CEO, in 1996. He rolled out the first franchise in July 2001. With a startup fee of $39,500, the company has grown to 20 U.S. franchises.
The field has changed dramatically since Krasno started. "Around 1996 to 1997, most [Web] consulting came from employees of Internet service providers," says Shane Greenstein, a professor in the management and strategy department of Chicago's Kellogg School of Management. "A lot of amateurs, technically adept guys running local area networks !were] giving advice on how to run a Website. Now it's much more professional, much more refined and standardized."
Greenstein says while there are "tens of thousands of businesses that would benefit from making their goods available online to a wide number of people," it's not the right move for every business.
"Some businesses, like gas stations, probably don't need Websites. And [hiring a consulting firm] can be expensive for small businesses that aren't pulling in a lot of money." Also, he adds, "more visibility means more competition."
But a lot of smaller firms do need the Web. While that suggests that Netspace is on to something, Justin Klein, a lawyer with Red Bank-based Marks and Associates, says there are no guarantees with franchises.
"You have to be careful with what you're getting into," says Klein, who represents franchisees against franchisors. "Not all franchises are McDonald's, and even some McDonald's franchises aren't successful. They [franchisees] see the word 'franchise' and think 'business in a box,' like going to Toys "R" Us and buying a model airplane. It's not always as easy as it says on the box."
Of course, a lot of franchisees do succeed.
Russell Frith, former chairman of the Washington D.C.-based International Franchise Association and CEO of Lawn Doctor, says franchising is an ideal business environment. Lawn Doctor, a landscaping franchise headquartered in Holmdel, has 475 locations in 40 states.
"You get a well-known brand, a successful system of methods and procedures, and a higher resale value than a nonfranchise business," Frith says. "And combined purchasing power. Lawn Doctor franchisees in groups of 100 to 200 can get big discounts from manufacturers on inventory like grass seeds and fertilizer."
He says Netspace is on the right track because "more people are using the Internet than ever" but the brand's low recognition factor may work against it.
"They have to establish brand awareness. Without it, they're very vulnerable," says Frith.
Greenstein says demand for what Netspace offers outweighs the company's relative anonymity.
"Ten years ago it was not obvious what the Web was capable of doing for a company. Since then there's been a nearly ubiquitous adoption ofWeb services by businesses, and they're willing to pay to get it right."