Tek-Net Hopes to Franchise Advice
In the beginning there was light.
Not long after, there must have come management consultants--to recommend what to do with it--and corporate development types to advise how to exploit its commercial potential.
And now, the world has Tek-Net Services Inc., which claims to be the first international, one-stop business consulting firm specializing in high-tech companies.
“No one else does what we do,” proclaims Bernard Gluckstern, president and chief executive of the 2 1/2-year-old Irvine firm. “We are revolutionizing the management consulting business.”
What Tek-Net does right now is actually quite similar to what management consulting companies such as Booz-Allen and Arthur D. Little have been doing for years: dispense advice to business owners and would-be business owners on matters ranging from administration to zero-base budgeting.
But what Tek-Net wants to do in the near future is novel.
Starting next month, the company hopes to sell $35,000 franchises to lawyers, accountants and other professionals throughout the country who routinely work with businesses and budding entrepreneurs.
Growth Industry
With a record 600,000 new business started in the United States last year, consulting and other professional services for would-be entrepreneurs have become one of the nation’s growth industries, especially in such hotbeds of new business as the Silicon Valley, Boston and Southern California.
Yet, there are those who question the wisdom of paying outsiders for those types of services, particularly that of writing a business plan--the service Tek-Net foresees as its bread-and-butter offering.
“We preach the importance of the entrepreneur doing his own plan, since most of the advantage of having a plan is going through the discipline of thinking through the proposed business,” said Richard Buskirk, director of the entrepreneurship program at USC’s School of Management. “Letting someone else do it is like getting someone else to do your term paper.”
But several of Tek-Net’s early clients say they are satisfied with the services they received.
“If I had to do it all over, I would write my own plan,” said Clarence Oliver, founder of Quality Power Systems Inc. in Houston. “But their plan gave me the tools that helped me raise the money I needed . . . and I have referred clients to them.”
The Tek-Net business plan calls for franchise holders, equipped with lap-top computers and slick, copyrighted software, to interview clients and send the computerized information over telephone lines to Irvine.
The information, essentially a completed questionnaire, would be transcribed automatically into a prearranged business-plan format and then reviewed by the Tek-Net staff and perhaps members of the company’s network of technical consultants.
“Of course, there is always organic interaction,” Gluckstern said of a staff member’s personal review.
Cost Starts at $25,000
The cost of Tek-Net’s services ranges from $25,000 for a basic business plan and corporate organization to $75,000 plus stock options for a package that would include taking the company from start-up through a public stock sale.
The franchise holder keeps 45% of the fees, an amount that Gluckstern said could cover the franchise fee within six months if the holder is moderately successful. Gluckstern, who has had at least one other venture in franchising, said he hopes to have 250 franchisees within five years.
In his previous franchising operation, Gluckstern was one of the original participants in World Mail Center Inc. in Camarillo, a firm founded in 1981 to be a computerized alternative to the U.S. Postal Service. As executive vice president of the company, Gluckstern helped create its franchise program, as well as its private and public financing programs, before leaving in late 1983.
The company, which managed to sign up just fewer than two dozen franchises, closed its doors earlier this year and said it was considering filing for court-protected bankruptcy.
