STRATEGIC PARTNERS
Richard Godwin, founder of Commercial Union Inc., wants to become the McDonald's of the ATM world. It remains to be seen whether ISOs are ready for the franchise concept.by Ann All, editor
May 25, 2000
Some retirees take up golf. Richard Godwin, a resident of Littleton, Colo., decided to tackle a more challenging pursuit -- running an ATM business. Nine months after selling Handle With Care, a 350-store chain of packaging stores that he had founded 19 years earlier, Godwin realized he wasn't yet ready to retire. A conversation with one of his former salesmen planted the idea of ATMs in his head. As he learned about the industry, Godwin decided he could take lessons learned from his previous business venture and apply them to ISOs. Because the independent ATM market is highly fragmented and in need of standardization, Godwin said, it's a good candidate for franchising. In February, he established Commercial Union, Inc. His first franchisee, Commercial Union of Colorado, has installed seven machines and sold another six. To encourage consistency among his franchisees, he has developed a 100 page manual on business practices. He also intends to encourage franchisees to attend trade shows and other industry events. "The more education you give your people, the better they'll do," he said. "If you hire somebody and send them to an industry convention, they'll come back with so much more to talk about when they stand in front of a customer." Godwin believes his approach is an improvement over the current system, in which larger ISOs typically either open additional sales offices or work with a series of independent sub-distributors to expand their geographic reach. Opening sales offices is not the best route to expansion, Godwin said. "I can grow faster with franchising than I can by opening company-owned offices and hiring managers. I'll get greater coverage faster with a franchise." Because sub-distributors are largely "unconnected," Godwin said, there are no consistent quality standards. Franchisees, working under a common name and with more accountability to the corporate parent, offer a better way to build a brand. Service tends to be strongest on a local or regional level, Godwin said. "Pushing service down to a local level -- that's the ideal. So you have a guy in Tampa, Fla., taking care of 30 or so machines in the Tampa area." Bryan Gray, vice president of Access Cash Midwest Region, isn't so sure that the idea of an ATM franchise will catch on. Unlike other business ventures, he said the ATM industry has a low overhead. And, he added, "I don't think this business is all that complicated." While fast food franchisees may appreciate a set of rules governing everything down to the temperature of the oil used to crisp their fries, Gray pointed out that the ATM business traditionally attracts entrepreneurs with an independent streak. A strong brand name is an advantage, Gray said, but franchisees only benefit if it's already well established. "Bryan's hamburgers aren't going to sell as well as Burger King or Wendy's -- franchisees want to know they'll have customers the day they open for business." His franchisees will have "pride of ownership," Godwin countered. "Certainly someone could go to work for Access Cash and be a manager or an employee. But with one of our franchises, he's a business owner with a great deal more pride in what he does." Godwin identified a good sales technique as the most important qualification for a franchisee, closely followed by a knack for operations. "I recommend hiring an office manager right after they sell their first machine," he said. Godwin hopes to recruit franchisees at an international expo in Orlando, Fla., next month. Ultimately, he said, he'd like to have 60 to 100 franchises in the U.S. Even at a time when the ISO market appears to consolidating, Godwin thinks there is room for at least that many new franchises. "Every machine that's out there today will have to be replaced in a few years," he said. Godwin may be reached at 303-689-0867 or rtgodwin@msn.com.
