Franchising business offers a good opportunity to various levels of business expertise and investment capital. Studies show that 97% of franchise businesses are still operating after the first year, compared to only 62% of independently owned. In most agency relationships, the franchisors are the risk takers whereas the franchisees prefer to steer clear of risks. In a franchising relationship, the franchisor and franchisee usually have different objectives
Insurance industry giants such as Farmers, State Farm, MetLife and others all use franchise agency business model. There is an interesting trend taking root in that industry. It involves franchise operations of some of the major insurance carriers some of which had recently begun to mandate unified communication system requirements or outright began offering their own hosted VoIP service.
OK, mandate might be a bit of an overstatement. Rather, franchise operators are strongly suggesting their agents to use corporate-owned systems and services by implementing the kind of subtly coercive pressure franchise operators can employ to make it sound like their agents have a choice. First, you create a set of standards that their voice system MUST meet. In the next step franchisor offers franchisee a choice of purchasing phone service or voice over IP system from any vendor that meets rather specific compliance guidelines or an option to purchase hosted PBX service that will always be in such compliance from the parent company. Anyone who has worked in these industries knows when franchise operators say “jump” their agents have to ask “how high?”
It doesn’t help that these organizations have couched their strong suggestions in logical-sounding language. Franchise operators are arguing their agents should use internally hosted PBX systems for the sake of “compliance with customer service requirements.” In other words, franchise operators are arguing every one of their agents need to use the mothership’s internal IP PBX service for the same reason these operators are mandated to use the same branding. To make an offer appealing, State Farm Insurance, for example, offers “Computers, phones, and related tools at little or no cost”. State Farm’s website also suggests: “You don’t have to be a computer whiz. The Insurance Support Center provides 24/7 computer and IT support for you.” Can’t help but to remember a scene from the “Kung Fu Panda”?
Master Shifu: After you, Panda. Po: What? Just like that? No sit-ups? No ten-mile hike? Master Shifu: I vowed to train you, and you have been trained. You are free to eat. [Po picks up his chopsticks] Master Shifu: Enjoy. [Po lifts a dumpling to his mouth, but it is snatched away] PO: Hey! Master Shifu: I said, you are free to eat. Have a dumpling. [Po tries another dumpling, it is snatched away again] Master Shifu: You-are-free-to-eat. Po: Am I? Master Shifu: Are you?
State Farm is only one of the few companies that are beginning to strongly suggest its independent agents to use corporate-owned and operated hosted PBX. Other companies also exert a high level of control over their seemingly independent agents, and their push to institute high “compliance” voice service provider requirements simply represents another step towards eliminating agent’s ability to run their business as they see fit. Some franchises outright disallow any use of predictive dialing while others offer their own implementation or set of guidelines.
I know, I know… all of this probably sounds a little melodramatic. It may not be easy to see how operating a single company-provided PBX system will strip independent agents of their independence. One, however, must consider the following two major concerns inherent within a franchise-owned PBX system:
- There is an inherent conflict of interests between the franchise and it’s independent franchisees.
- PBX systems will allow franchise operators to control how their agents build communications and relationships with their clients.
- Internally hosted PBX systems gives franchise operators access to every call their so-called “independent” agents. Whoever operates your PBX system has the ability to record every call and voicemail that moves through that system, stripping independent agents of their autonomy and their privacy.
If you’re an independent agent who values their independence, then you really need to think about whether you’re willing to sacrifice even more of your autonomy and your privacy to your franchise operator by giving in to their strong suggestions to comply with their internally hosted PBX systems. By working with a private, external PBX provider you will keep your communication systems your own, and ensure your ability to go about your business as you see fit.
There is nothing particularly troubling about VoIP service providers seeing competition. The issue at question is whether having so much control over your “independent” agent’s voice and email communications with their respective clients is in the agent’s best interest. Could there be a hidden agenda here? Having access to your employee communications data is one thing but most agents operate independently as partners of an insurance corporation. Partner’s usually don’t have access to each other’s call records or recordings, dial plans etc.