Paragon opens a new franchise in The Netherlands.

Paragon Relocation recently announced its first franchisee, Paragon Relocation Holland. Paragon Relocation Holland specializes in international relocation, housing services for expatriates and Dutch immigration. The relationship marks a new expansion into Europe for Paragon Relocation Resources and is an exciting new challenge for both organizations. Paragon’s franchising efforts are an integral part of the firm’s continuing expansion beyond the United States and throughout the world. As this exciting venture continues to take shape, there seems to be a discernable buzz in the air. To learn more about it all, we recently sat down with Senior Vice President of Global Business Development Craig Selders, who is leading Paragon’s franchise efforts.

Q: Paragon has been quite active in Europe lately and has recently launched a strategy in Europe. Can you take us through what the new business will entail, how it was started and the thought process behind the new endeavour?

A: Selders: Paragon began planning for expansion into our global destination services franchising business more than two years ago, and the idea was based on the vision of Joe Morabito, our President and CEO. A great deal of strategy and planning has developed during that period of time. However, this strategy goes beyond Europe. We have identified the top 45 countries and 75 cities in the world as our primary target markets. These locations were identified as a result of researching the locations of the 2000 largest companies in the world. We have developed this strategy to not only grow and invest in Paragon’s future and continue to support our clients’ global initiatives, but also to balance our blend of services and capabilities. By doing this, we are also able to more effectively withstand changing economic conditions around the world, and remain healthy and profitable.

Paragon is entering the destination services business worldwide, either through franchising or what is called a “company store”, which is a Paragon-owned destination service business. Our objectives include continuing to develop enhanced support of our clients’ global growth initiatives; building and enhancing our brand name awareness around the world; building a channel for increasing revenue opportunities; seeking opportunities to market the Paragon brand and our services to companies around the world; and building a world-class franchise and company store network. During the process of building this business we have had to consider all aspects of starting a new business internationally. We had to consider many important topical areas such as legal, technology, finance, staffing, Human Resources, currency, cultural and language differences, etc.

We have put together a world class team to build this business: Liam Brennan is the Managing Director of Paragon Relocation Holdings (PRH), an Irish company and the parent of the franchise and company store business. Liam is based in Dublin, Ireland. Supporting this business in Dublin are Jonathan Capper, Controller and Alina Postrozny, administrative support. Tony Baldassarro is the Managing Director of Company Stores based in London and is supported by Amy Cullen, Destination Services Manager; Julie Pratt who will be assisting us from Peterborough, England; Chris Henry, who is responsible for EMEA sales and Silvia Brizi, administrative support. We have a great team in Geneva, Switzerland as well with the support of Judith Finetti and Aurelie Bart. Janelle Gerber in Warrenville, Illinois is assisting with many aspects of building this business as well.

"We have developed this strategy to not only grow and invest in Paragon’s future and continue to support our clients’ global initiatives, but also to balance our blend of services and capabilities."

Our first significant opportunity for a franchise has developed in Europe, specifically in The Netherlands. As of September 24, 2007, we reached an agreement with Holland Relocation to become our first franchisee. Effective immediately, Holland Relocation will begin doing business as Paragon Relocation Holland. Over the next 12 months we will implement a comprehensive transition plan to make this change complete. Our new partner is headquartered approximately an hour outside of Amsterdam, with a new satellite office outside Rotterdam and a third office planned to open in December in the northern part of the country to cover all their business centers. The principals of the firm are Geoff and Rosie Mills and Rachel Hall, and we are all very excited about welcoming them to the Paragon family of companies.

We have also expanded our relocation and destination services sales efforts in Europe through the support of Chris Henry, who is based out of our London office. Chris has recently negotiated his first major opportunity with a European company, which we hope to announce very soon. This company, a global retail product manufacturer, will be provided with destination services in four European countries. Ultimately, by creating franchise and company store operations around the world, we will be in an excellent position to broaden and expand our sales efforts worldwide.

Paragon has been in Europe for quite some time. How will these new changes affect current Paragon clients and the type of service they’re accustomed to?

Selders: Paragon has had offices in London and Hong Kong for a number of years. Earlier this year we opened a new facility in Dublin, Ireland to form the base for our International Relocation Operations, our global relocation clients, and for our franchise and company store operations. Our London office is now exclusively a Paragon company store, where our clients will be able to avail themselves of world class destination services. As mentioned, this office is led by Tony Baldassarro. Tony’s responsibilities include managing all company store operations for Paragon. In addition, Tony has recently helped establish our company store operation in Geneva, Switzerland. We are also now prepared to accept new Destination Service business in Dublin, Ireland.

In areas where we do not have a franchise or company store, we will continue to utilize Destination Service Providers (DSPs) with whom Paragon has a working relationship. These companies are managed through our Business Alliance function in Dallas, Texas. Therefore, we will continue to have global coverage for destination services through a franchise, company store, or affiliated DSP.

These changes are basically enhancements to our service capabilities that our clients can now utilize. We recognize the significance of the globalization efforts of our clients. Their expatriates need and expect outstanding service from Paragon around the world.

What is the difference between a company store and a franchise store?

Selders: Basically, a company store is a Paragon-owned enterprise. We are the Destination Service Provider. The staff in a Paragon company store is comprised of Paragon employees. A franchise is owned and operated by individuals who have previously owned their own destination services firm, but have decided to take advantage of the Paragon brand and capabilities by franchising with us.
There are similarities as well. Both franchises and company stores, through the legal nature of franchising, have signed a franchise agreement with Paragon. Therefore, both entities have the obligations as outlined in the franchise agreement, whether these obligations are financial, legal, quality, etc.
This business model is not at all unusual in the world of franchising. For example, McDonald’s franchises many of their stores, but many of them are owned by McDonald’s. The main reason for this is strategic: business opportunities are such that the economics make sense for the company to own the business as opposed to franchise the business.

What have been the results so far in establishing franchises and what is Paragon’s outlook for the future?

Selders: The results are encouraging. We have presented the concept to more than 35 companies world-wide at events such as EuRA (the European Relocation Association) and ERC, and we have conducted roughly 10 WebEx presentations to firms all over the world. New ideas can take a while to settle in. However, the primary advantage for franchise candidates is that we can actually help the franchisee become a global relocation firm in their market. This will help them compete more effectively with the larger relocation firms who have opened offices in their city and country. So, we are offering them a chance to compete. Some firms see this immediately—some do not. Some firms are very satisfied with the status quo and do not see the competitive forces coming the way we do. However, we continue to have validation of this point when we see our competitors open offices around the world, and take away business from local DSPs. Through Paragon’s franchise business we can offer them an option which, at the moment, no one else can.
As far as the future, I am encouraged and optimistic mainly because of the results we have seen so far. We are fortunate to have a very strong team in place overseas. We are going to continue to work very hard to meet our objectives in PRH while continuing to provide outstanding customer service to our clients, their expatriates and families.

What is the biggest challenge you have faced in trying to sell the franchise concept to potential franchisee organizations?

Selders: For every new idea and concept, there is always skepticism. It’s natural. People are hesitant to accept new ideas and concepts, of any type, because many people and organizations inherently do not like or want to take risks. I think some franchise candidates are very comfortable in their current position; perhaps they are close to retirement, perhaps they are looking to sell their firm, perhaps they are not enamoured with the financial and service level requirements of being a Paragon franchise. However, there is one very interesting point I’d like to make. We have surveyed many of the DSP firms who have attended our presentations, and not one has told us the idea is not a good one. They may have reasons for taking a different course, but they are all intrigued. I think that tells us that we need to continue to seek out those firms who are progressive, enlightened and would fit well within the Paragon family of companies. After all, they will represent the Paragon face around the world for years to come.