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Review of City
Local Franchise
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This is one of a few examples of Business Opportunity Watch Reviews which are freely available
for everyone to read on the public section of the website. The reason for making a small sample of the reviews freely available is to
help you to decide if you want to join, and also to communicate some matters of general interest arising in the case of some of the
reviews. All the other reviews are available only to
members.
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Review from Business Opportunity Watch Reviews
November 2007 Issue 9
CITYLOCAL
Citylocal
1 Ralston Mount
Broughty Ferry
Dundee
DD5 1NN
Tel: 0844 8845448
www.citylocal.co.uk
- Extract from sales copy
- Review
- Your feedbackHi, I am Nazir Daud. I have lived in the UK for 35 years. I started business with my father and set up a local cash & carry. Then I ran my own retail store for 4 years. After selling the newsagent I started a company with Zak Daud selling packaging to manufacturer companies. In the space of 5 years I built this company from scratch to £3 million turnover. I then sold it to my staff in a management buy out.
The idea of the CityLocal Opportunity came to me when I was searching on the internet for a local business. I had great difficulty in finding the business. When I did eventually find it all I got was name & phone number! This didn't tell me much about the business at all!
The Business Benefits of CityLocal...
Businesses who advertise in the papers are only seen for 1 day. If they advertise in CityLocal (for only £15 per month) they can be found each and every day of the year!
Each business will have: a) name b) address c) phone number d) fax number e) email address d) weblink e) up to 500 words of text f) picture g) company logos
All businesses who advertise will also get a bonus: they will be able to advertise their properties for sale and properties for rent for free on our site.
What else does the CityLocal Opportunity offer...
All users of our site will be able to post a free advert for absolutely anything. We are giving this option to our users absolutely free!
Have you ever tried to find out whats happening in your local city? Wouldn't it be great if all the information was clearly on 1 site that was easy to use? On this 1 site you check whats on at the local cinema, theatre, call a taxi, find a great restaurant and plan your evening. Wouldn't it be great before you booked a table at a new restaurant - You can see the ratings given by others who had recently been to the same establishment?
In the fun pages section we provide a free crossword, horoscope and sudoku puzzle daily. The children will have access to 14 arcade games for free. All this content will drive users back to our site on a regular basis.
In CityLocal, each user will be able to rate a business and give them a rating of 1 - 5 stars. Each person will only be able to rate the business once. When you see the rating, it will be an average of all the ratings added together. Businesses with low star ratings will eventually have no choice but to improve their service.
This is a World First. We only want the best local companies in our directory.
If you are planning a day trip, let CityLocal help you decide. We will have a section that is informative about all the local outdoor parks, trails, hikes, views, shows & events. Is their a fair / band in town? When did it arrive? When does it leave? Maybe this information was in Friday's paper. Didn't you chuck it out at the weekend?
That's the problem with newspapers. Any information of any use is only available until that newspaper is thrown away or sent for recycling. If a top artist is coming to town CityLocal will have this information on the site until he / she leaves.
Another World First - every city in the UK is going to have access to and advertise in Post a Free Advert, totally free of charge. They can create an advert which will automatically get deleted after 1 week. If they still haven't found a buyer then they can just log back in and re install. This will keep the articles for sale section fresh for users so that they only see articles for sale that are still available.
In the property section everybody will get to advertise their property for rent free of charge for the time being. Soon we will charge a small fee for advertising properties for sale or rent. Again £50 for a half page advert for 1 month and £100 for a full page advert.
Businesses will want to advertise in CityLocal because it's a low cost way to get more business. From only £15 per month they can have a full page on the net!
Each business will have: a) name b) address c) phone number d) fax number e) email address d) weblink e) up to 500 words of text f) picture g) company logos
CityLocal was created to be a Local City Hub. Each city will be run by one local entrepreneur who knows his city and is aware of local issues.
Review:
CityLocal was launched in June 2006. According to a press release dated 26 August 2007 "they now have over a dozen franchisees".
There are now quite a lot of local community internet directory franchises, such as the following
AboutMyArea.co.uk
BestOf.co.uk
focusportals.com
gemdate.co.uk
locallife.co.uk
onmydoorstep.co.uk
tradingtowns.co.uk
YourHomePageIn.co.uk
The key issue is this:
Have all these franchises sprung up because there is a high demand from local businesses to be on numerous local community internet directories?
Or have they sprung up because franchise promoters know that franchises of this type are easy to sell because potential franchisees are easily convinced that many local businesses will want to appear on such directories?
It's reasonable to assume that businesses would probably want to appear in directories if they could be shown evidence that their prospective customers will actually get to see their adverts.
So let's have a look at the marketing strategy of CityLocal.
In their franchise prospectus, on the page headed "Advertising is the lifeblood of the internet - Webverts on CityLocal are found on the search engines" CityLocal features an advert for a small business in Leicester called the Gayatri Beauty Clinic. As they say, this advert "is much more than a name and number in a classified phone book". It gives the name, address, telephone number, mobile number and website address, as well as a list of the beauty treatments available (although without any prices).
The directories also contain reviews. In a Press Release of 14th July 2006, Naz Daud, the founder of CityLocal, says, "CityLocal contains contact details for lots of local companies and, for the first time, it gives people who use these services the chance to review the firms. This way, it will be possible for everyone visiting the site to find out what sort of reputation a firm has before they call them."
I visited the CityLocal site at Dundee, which is the directory which was set up by Naz Daud in July 2006 in his own home town. The review system seems to operate by simply clicking on a Rate this Business link and selecting a number from 1 to 5 and ... that's it, that's all there is to it. There doesn't seem to be any facility to leave a comment or to prove that the review rating is from a genuine customer.
Under the category "Home Tradesmen" the number one result is "Dave Taylor Carpentry and Joinery" who has a 4-star rating. I tested the system by clicking on "2". This seemed to go through OK, but there was no request even for my email address. Sorry to Dave Taylor for this, but luckily it does not seem to have had any effect on his 4-star ranking.
Which brings me to another point. These advertisers are paying for their adverts, so if one of them did get poor results so that their rating was only one star or two stars, that would be negative publicity so surely they would simply pull the ad? I don't see how this review system can work in a proper manner.
I did notice that the "Premium Advertisers" under the "Home Tradesmen" category for Dundee - of which there are only 4 - all had a four-star rating, whereas the one entry under "Other Businesses in the Area" only had 2 stars. A coincidence, no doubt.
Under the category for "Nights Out" there were 12 Premium Advertisers, every single one of which had a 4-star rating, whereas the "Other Businesses in the Area" in the same category were all rated at 2 or 2 and a half. Another coincidence, which no doubt visitors to the site would find rather strange as I did.
Obviously, whilst having a lot of detail about your business in an advert on the internet is nice, it's only going to bring you business if your potential customers will be likely to see it. According to the franchise prospectus this is not a problem. It says, "They can also be found on the internet search engines. so if someone typed in 'Leicester Health and Beauty" for example, adverts for this type of business on the CityLocal website should appear on the first page of Google".
To me, the obvious terms to enter if I am looking for a beauty clinic in Leicester are "beauty clinic Leicester", so this is what I keyed in on Google. However, the CityLocal site did not come up at all on the first three pages.
I tried again with the suggested search terms "Leicester Health and Beauty". This time it worked - CityLocal came up as the third entry on page one and the third entry on page 2.
The results were similar when I keyed in "Health and Beauty Leicester", with CityLocal coming up as the sixth entry on the first page.
I then moved on to have a look at another business featured on page 5 of the franchise prospectus, headed "Search engine first page exposure...". This business was a local accountant and the example was given of keying in the search terms "Southampton business plans". This worked - CityLocal came up as the eighth entry on Google's first page.
However, if I were in Southampton looking for someone to do a business plan for me, I think I would key in "Southampton business plan" - without the "s". Oddly, this search term does not bring up CityLocal at all in the first three pages of Google.
Because my research of CityLocal's Google placement had so far produced such varying results, which appeared to depend on the specific search terms, I decided to try some common search terms such as "plumber" and "restaurant" and "florist". From the list of "towns" shown on the website, some of the ones I initially chose such as Belfast and Windsor and Maidenhead hardly seem to have got started with advertisers, so they are presumably new franchisees.
To give the fairest test, I chose Dundee, which is the directory which was set up by the founder Naz Daud in July 2006 in his own home town, together with two towns which have a number of advertisers - Manchester and Sutton Coldfield. Here are the results:
Dundee search terms:
"Dundee restaurant" - nothing on first 3 pages of Google results
"Dundee florist" - nothing on first 3 pages of Google results
"Dundee plumber" - Bingo! - two CityLocal results on Google's first page!
Manchester search terms:
"Manchester restaurant" - nothing on first 3 pages of Google results
"Manchester florist" - nothing on first 3 pages of Google results
"Manchester plumber" - nothing on first 3 pages of Google results
Sutton Coldfield search terms:
"Sutton Coldfield restaurant" - nothing on first 3 pages of Google results
Sutton Coldfield florist - nothing on first 3 pages of Google results
Sutton Coldfield plumber" - nothing on first 3 pages of Google results
These results highlight the weaknesses of a business model which depends on search engine placement for marketing and which is therefore jostling for position with the large number of other directory websites - both the franchised ones mentioned at the beginning of this report and a number of long-established non-franchised ones such as touchlocal, upmystreet and 192.com.
By contrast, an offline marketing system such as that used by UK WebSaver (reviewed in Business Opportunity Watch Monthly No. 7 September 2007) neatly avoids these problems and this was one of the reasons for the high rating of 9 out of 10 given to this company's offer.
I moved on to look at the prices for businesses to advertise on CityLocal. There is a setup fee of £50 per advert, and you then pay £15 per month for a Standard Advert, or £25 per month for a TopSpot Advert, a TopSpot Advert being the same as a Standard Advert except that you are guaranteed to appear at the top of the list for your category.
I am not sure what the justification is for a setup fee for adverts, because the franchise prospectus says that it is very easy to set the adverts up and there should be no direct costs associated with it. In the advertising world, it is not normal to pay a set-up fee and businesses would be resistant to it.
The cost of a CityLocal franchise starts from £9,900, depending on the size of the area. What you get for this includes a website for your area, 4 days of training and a full marketing pack. The marketing pack includes a PDF presentation sales tool which you can print off to show to local businesses, a mailing letter template, 250 business cards, flyers to give to or mail to potential customers (the number is not specified). Whether the training is residential is not stated but, even if it is, £9,900 would be much more than the direct costs associated with each new franchisee.
£9,900 is expensive for a franchise whose name is virtually unknown to potential advertisers and - more to the point - unknown to the potential customers of those advertisers.
Whilst the websites are professional-looking and it is clear that the CEO Naz Daud works hard and gives personal attention to his franchisees, the franchise appears over-priced, particularly in view of the work that remains to be done to ensure consistent first-page Google results.
Readers who are interested in this franchise should carry out their own Google search tests. It would also be useful for you to get in touch with some of the CityLocal advertisers to get their feedback, in addition to contacting existing franchisees.
Finally, it's important to note that anyone considering this franchise should not pay undue heed to CityLocal's Alexa ranking because, as explained in Business Opportunity Watch Monthly Issue No. 6 August 2007, Alexa statistics are unreliable and can be influenced by a number of specific factors which don't necessarily relate to a site's popularity with the general public. Instead, therefore, you should ask the company for their traffic logs.
Rating:
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End of review of City Local franchise
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