Review of City Local Franchise
Local Town Internet Directory Franchise, CityLocal, Nazir Daud

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.

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


- Review
- Your feedback


Review:

NB. This review was carried out in November 2007. In September 2011 we received input from CityLocal, which has been added to the review as shown below.

CityLocal was launched in June 2006. According to a press release dated 26 August 2007 "they now have over a dozen franchisees".

In addition to CityLocal, 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?

Feedback from CityLocal September 2011:
We have been on a fairly aggressive development campaign over the last 18 months and you will notice that our site has changed substantially. We provide more than just a business directory now. We automatically populate content onto each site centrally everyday to give local people useful information and content that keeps them coming back.

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.

Feedback from CityLocal September 2011:
All business listings now have a page view counter to show to the customer and all who visit the site how many time each listing has been viewed.

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 CityLocal says, 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 CityLocal's 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 CityLocal's 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 CityLocal 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.

Feedback from CityLocal September 2011:
Our review system has been improved substantially where we have now removed the star system and introduced the ability for visitors to leave a full written review for a business. see example here:

http://www.citylocal.co.uk/York/Interior-Designers-in-York/Tricia-Douglas-Interiors-Ltd/b-ac06/review

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 CityLocal's 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 CityLocal 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 like CityLocal 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. 

Feedback from CityLocal September 2011:
Our business system is now based on generating ‘page views’ for the customer. Our traffic has been increasing year on year and customers can measure their performance with CityLocal. Franchisees can offer SEO services and we back up that service with Google PPC if necessary so that they can deliver their promise.

Also, we now have additional strategies that include:

1. Vouchers – businesses can have vouchers on the site and they can be shared on all the major social networks. Also, we automatically send out voucher newsletters to anybody who has registered / subscribed on the site once a week. I have included a copy of the newsletter at the end of this document (push marketing).

See example voucher page here - http://www.citylocal.co.uk/cities/falkirk/vouchers/

2. We have voucher booklets where franchisees can charge businesses to have their vouchers included within the booklet that gets posted out to 1000’s of letter boxes within the franchisees territory (off line strategy). I have attached artwork for an example booklet for you to have a look at.

3. Franchisees can also offer banner adverts on the site that generate additional traffic to the customers listings.

4. Franchisees can now also offer websites to local businesses as part of their offering.

5. Franchisees can now also offer voucher spotlights that get feature accross various locations on the website.

6. Franchisees have recently started promoting businesses and their site to generate more traffic utilising Social Media and in particular Facebook. We are in the process of rolling this out now. See example here - http://www.facebook.com/CityLocal?sk=wall

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 CityLocal's 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. 

Feedback from CityLocal September 2011:
The prices have now changed to £99 + VAT setup fee and £25 - £35 per month for the listing. The reason for the setup fee is that the franchisee is trained to construct the advert in such a way that the advert has maximum opportunity to get picked up on the search engines for multiple search terms to generate more page views. This does take a level of skill, time and research to do this professionally.

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 CityLocal 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 CityLocal websites are professional-looking and it is clear that the CEO Naz Daud works hard and gives personal attention to his franchisees, the CityLocal franchise appears over-priced, particularly in view of the work that remains to be done to ensure consistent first-page Google results.

Feedback from CityLocal September 2011:
Our franchise prices now start at £2,900 + VAT for small areas and go up to £9,900 + VAT for our largest territories although we offer various options to reduce the initial outlay substantially. Also, if franchisees pay the service fees upfront, we can offer substantial discounts to reduce their costs further.

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.

Feedback from CityLocal September 2011:
If new franchises are interested in the franchise, we can demonstrate traffic to business listings and we can also show traffic to our site as a whole through our admin control panel.

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 CityLocal for their traffic logs.

Update September 2011:

As a result of the recent developments to the CityLocal website and the comprehensive business listings, together with the new local marketing initiatives (e.g. door drops and voucher email newsletters) we're now raising the rating of CityLocal from the previous five out of ten to six out of ten.

Rating:

●●●●●●○○○○


Your feedback:

Have you tried this opportunity?

Or would you like to comment on the opportunity or on our review, even if you haven't tried it?

If so, please send us an email. Your feedback will then be posted here anonymously unless you tell us that you want your contact details included.

Feedback 1st December 2011 from David Williams – CityLocal Penzance:

Dear BOW,

Following some major changes in my life, I was looking for a good quality business that I could operate to suit my circumstances. After months of careful review, I decided on Citylocal because their proposition for businesses was simply the best in the market place.

When customers have seen the depth of the site, they have fully understood why Citylocal is the website to be on. The original website was great and the new website is fantastic! It is fresh and has great local content, automatically updated and all in one place.

Since starting the business, I cannot fault the help and support received from the team at Head Office. The rapport with Head Office and other Franchisees is also good and I am pleased to be part of such a great team. I now have a client bank of over 180 customers and I am really looking forward to the 2012, especially with all the new product developments that can only enhance my offering!

Best regards,
David Williams
CityLocal Penzance

Feedback 14th September 2012 from Toby Smith – CityLocal Falkirk:

Dear Business Opportunity Watch,

Your website was recently brought to my attention and after reading the content I felt compelled to submit my own personal review having operated the Falkirk site since March 2009.

If any of your readers/site visitors are seeking a “Get Rich Quick franchise from home”, CityLocal is not it and as we all know, there isn’t one! However, in my 3+ years I have built up a solid client base with excellent retention rates. Most have taken up the more recent additional options / offerings.

In your review I note that you quote sites on the platform that are not managed such as Maidenhead and Manchester etc. Sites that are unmanaged have zero paying clients and therefore they will not come up in the Google search results. Even where sites are managed if a customer is not a paying customer – we will not optimise their listing. With very few exceptions, we do produce the results and provide the client excellent value for money when compared to the competition and Google Adwords for example.

Furthermore, my clients are offered their preferred keyword search terms with suggestions based on keyword tools etc. and this has produced exposure for the client resulting in not only direct hits but more importantly, new business for the client. It can take some time to create a highly optimised listing, hence why we charge a nominal set-up fee.

Only my paying clients are optimised for their preferred search terms and should you search for plumbers in Falkirk then you will be disappointed, as I do not have a plumber paying for my services yet. This also explains why if you are searching for any product/service in an unmanaged area you will be equally disappointed!

I and others, regard our sites as highly efficient “dumping grounds” for the end-user’s search results if correctly managed. The fact that the site is now fully featured with fresh content being automatically updated daily is an attractive feature, which does drive traffic to my site, yet does not earn any revenues.

The training and subsequent support has been beyond the level I personally expected back in 2009 and further encouraged by the constant development of additional offerings which are not only attractive to the client but do provide additional revenues for the franchisee.

Safe to say that since investing in CityLocal my income has not provided a yacht moored in Cannes but suffice to say that I am still here after 3+ years and have absolutely no regrets in taking on this franchise and this was after some 6+ months of due diligence where I researched the market thoroughly.

Kind regards,

Toby

Toby Smith
Citylocal Falkirk
Office: 0843 289 8173
Mobile: 07749787242

Feedback 19th October 2012 from Paul Crump – CityLocal Torquay:

Dear Marian,

A customer of mine was doing a search on CityLocal, stumbled upon your website and was alarmed by what he had read, and emailed me a link. After 18 months working as a CityLocal franchise owner I can categorically tell you that the CityLocal website is not only a better platform than other local directories, it is genuinely the only franchise I have ever come across where the owners of the franchise work tirelessly in updating and improving its proposition for the benefit of all of us.

In these modern times we all know that the majority of us will look for products and services via the internet so to have high rankings on the most used search engine is imperative for any business. I can guarantee high rankings to local businesses that pay me for this service, because if I fail to deliver, and follow the guidelines when creating the business listing, then CityLocal HQ buy the sponsored adwords. We do not optimise every business listing on my site, just those that pay for this service.

The owners of CityLocal are determined to make the CityLocal concept unique and to achieve this they have worked hard with their franchisees, in improving the platform. For example, every business has its own QR code, the platform has been mobile enabled and there will soon be a CityLocal iPhone APP. The platform offers a superb Voucher promotion scheme plus a review system is in place to enhance the decent businesses potential to attract new customers. There are other things also like Banner Ads and web design facilities.

Before I decided to buy a CityLocal franchise I did my due diligence and found that compared to all other offers, a CityLocal franchise seemed to be one of the only ones that would continue to offer support once they had got my money. I can tell you quite categorically that this has proved to be the case. I came into this role with absolutely no experience in marketing or computing and yet within a very short period of time I was earning a good living. Don’t get me wrong, I will never be rich BUT I earn a damn good living with the added bonus of working from home.

There appears to be a few negative comments on some of the old platforms facilities such as the review system. This is based on the old review system back in 2007. There ought to be equally positive comments on the current review system which I can tell you, is constantly used by visitors to my website.

Without having no bias I can categorically state that the CityLocal platform works well for me and my customers, and is constantly being worked on and improved. I am glad that I invested in the business.

Kind regards,

Paul Crump

Website: http://www.citylocal.co.uk/Torquay
Website: http://www.citylocal.co.uk/NewtonAbbot
Email: paulcrump@citylocal.co.uk

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