Franchise Security Program Targets Custom Installers

While the franchise model for custom A/V has had trouble taking root, a relatively new franchise model for security systems targeting custom A/V companies appears to be thriving.

Shield Security Systems FDC (Franchise Development Corp.), based in Williamsville, N.Y., has awarded 23 franchises in six years. Unlike other dealer programs on the market, this business model allows the integrator to keep the monitoring fees, thus increasing the value of his business over time.

The program has a franchise fee of $35,000. Franchisees pay royalties of 5 percent of gross sales with a 1 percent national advertising fee.

Shield monitors the accounts from its central station, guides franchisees with a turnkey business model, and provides a complete marketing plan and materials, such as door hangers. Franchises have protected geographic territories and are standardized on Bosch equipment.

Shield was started 12 years ago by president Ken Jezioro, a former police officer in Buffalo who sold security systems part time. His wife Mary is the vice president.

"The trend we are seeing is more custom A/V companies are looking for an alternative revenue stream. People want a one-stop shop," says Mary, who also creates all the marketing material for the company.

"Each franchisee has its own Web site and generates its own leads. Our average franchisee earns $1500 per sale." One of the big concerns for many A/V integrators in regards to security is obtaining the licensing. Shield actually holds the license on behalf of the franchisee until he earns it. (Licenses are required in 38 individual states.) The company also holds a national conference and weekly instructional Webinars.

For Jeff Allen, owner of The Sound Company Inc. in Charleston, S.C., the simplicity of Shield's turnkey franchise program made adding security to his A/V business a "no brainer." "For eight years I have seen too many jobs that I would lose the contract because I was not installing burglar alarms. Shield Security is a good marriage for my A/V company: I get to retain the residual recurring revenue from security, it opens up new markets of lower-priced homes for me, and I get to keep my customers," says Allen.

"With other dealer-type programs, I feel like I am losing my customer. Even though I might make more money at first with one of those other programs, I don't think it's fair to the customers. At the end of the day, it's my customer." Allen's average security installation is $900 and he is doing four per week, while still handpicking A/V clients. His monthly monitoring is $18.95 based on an annual payment of $227, well below the monthly fee required from other programs. He had to cram for the security exam, but is now licensed.

His company is now called The Sound Company dba Shield Security.

The franchise has allowed him to open up homes in the $100,000 to $200,000 range, vs. the restriction of being able to sell A/V systems to clientele living in more-expensive homes over $400,000 in the area.

Allen believes at least 80 percent of his past A/V customers with security systems will change to Shield because "they likes us and trust us." "There's no comparison to keeping the customer and getting their monitoring money over the long term. Plus, you will get their A/V business eventually," he adds.

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