For trade businesses
Buying leads versus buying a franchise
These are the two realistic ways a New Zealand trade business buys work it did not generate itself. We sell one of them, so read the next paragraph before the table.
A franchise is not a worse product. It is a different product, and for a decent number of people it is the right one. What follows tries to be straight about which is which, because the alternative is you buying leads that were never going to suit you and concluding that lead generation does not work.
Side by side
| Franchise | Buying leads | |
|---|---|---|
| Up front cost | A territory purchase, commonly from around $15,000 and rising with the size and maturity of the area. | Nothing. You pay for the first lead when you take it. |
| Ongoing fixed cost | A monthly fee whether or not you get any work that month, in the order of several hundred dollars. | None. A quiet month costs you nothing. |
| Cost per lead | Typically charged on top of the monthly fee, in the region of $9 to $18 depending on the division. | $15 to $25 for the higher-ticket trades, $8 to $12 for the lower-ticket ones. No fee behind it. |
| Exclusivity | A defined territory, which is genuinely valuable: nobody else in the brand works your patch. | The enquiry is exclusive rather than the territory. Another business can take leads in your area, but never the same enquiry. |
| Brand | A recognised name, often decades old, that does real work on the doorstep before you say anything. | Your own name. The enquiry arrives knowing your business, not ours. |
| Training and support | Structured induction, a business coach, and a network of other operators to lean on. | None. This is a lead source, not a business-in-a-box. |
| Getting out | Sell the territory, subject to the franchisor approving the buyer and whatever the agreement says. | Stop taking leads. There is nothing to sell and nothing to exit. |
Franchise figures are indicative and taken from publicly published New Zealand franchise material. They vary by brand, division and territory, and anyone seriously considering one should get the current numbers from the franchisor rather than from a competitor's website.
A franchise is the better answer when
- You are starting from nothing and have never run a trade business. The training, the systems and the coach are worth real money, and paying for them is rational.
- You want a recognised name doing the persuading before you arrive. Brand recognition genuinely converts, particularly for older customers.
- You want a defined patch nobody else in the brand can work, and you value that certainty more than flexibility.
- You want an asset you can sell later. A territory is a saleable thing; a lead account is not.
Buying leads is the better answer when
- You already have a business, a name and a ute, and what you actually lack is work.
- Your months are uneven and a fixed fee in a quiet winter genuinely hurts.
- You want to test whether a new suburb or a new service line is worth committing to, without buying a territory to find out.
- You do not want anyone else's rules about pricing, branding or how you run the job.
The maths that actually decides it
A franchise costs you the monthly fee before you have done any work. At several hundred dollars a month, that is a few thousand a year you have to earn back before you are level. Buying leads costs you nothing until you take one, so the comparison is not really fee against fee: it is certainty against flexibility.
If your work is steady and the brand would bring you jobs you cannot get yourself, the fixed cost buys you something real. If your months swing, paying a fixed fee through a quiet winter is the part that hurts, and paying per enquiry is the safer shape.
If leads are the answer
Start with what a lead is worth in your trade, since that varies more than anything else here.
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