Why would we move forward with LocalUp and the product if we already have our own site or our own IT team/budget?

• The reasons to work with LocalUp:

  • LocalUp has spent 8 years studying the online local advertising and food ordering industries and built customized applications that meet specific needs.
  • The technology is cutting edge and is continuously being enhanced based on the feedback of over 50 internal users, ongoing focus groups of thousands of users and restaurant clients, and current market conditions.
  • The product has an established, proven call center operation staffed with 15-20 dedicated personnel who handle all restaurant client requests on a real time basis.
  • The product allows for your team to focus on core competencies, not on niche products.
  • The proven business model experience allows for your team to be trained effectively, for a quick-to-market solution and focus on core competencies of local sales and local marketing execution.
  • Combining superior technology with local execution and oversight is why this model works. The restaurant industry is an ever-changing and dynamic industry, making it very difficult for national competitors to compete online in this industry on the same level a local entity can – but a local entity must have both, a best-of-breed platform and local oversight to be successful in this vertical.

What skills does my team need to have to execute this business opportunity?

• Below is a list of recommended skills:

  • Sales/Selling Ability
  • People Person
  • Marketing (SEM, Social Media, Off-line)
  • Simple Accounting/Quickbooks
  • Graphics (Photoshop)
  • Detail-Oriented

How many human resource hours do I need for this business opportunity?

This depends on the number of restaurants and size of market, but below is an example of what is recommended for a certain territory or market:

• Size of Market - 150 restaurants; 150,000-250,000 residents/students

  • 20-30 hours of content management/graphic design per week
  • 30-40 hours of sales and CRM per week
  • 30-40 hours of marketing per week
  • 5 hours of accounting
  • 5 hours of admin

Will I make money the first year?

Starting a website and building a brand online is something that takes time. Licensees can’t go into this venture expecting to “open the doors” day one and start generating revenue. Creating and launching a new business online is not like opening a standard “brick and mortar” business – location is not relevant, it’s created and becomes relevant over time (via your URL). Some time is needed in order to grow the daily traffic and gain traction. A site can only start generating revenue once it has an established user base. In order for any site to generate traffic, the site needs to be populated and then marketed effectively, eventually allowing word-of-mouth marketing to help grow the traffic, which ultimately generates the revenue.

• As mentioned above, in the virtual world, physical location is non-existent and thus the areas of competitive advantage a website can rely on are the following:

  • First Mover Advantage & Traction
  • Superior Functionality, Features & Support
  • Complete and Unique Content

If a website can take advantage of these three areas of competitive advantage, it will gain traction with effective and consistent marketing (one aspect of executing the business model on the local level). Once the traffic is established with the site and word-of-mouth takes over (the tipping point), it becomes very difficult for competition to come in and take traffic and market share. This is the advantage of launching a digital product that provides great utility. However, it must be realized that a website can’t be treated like a brick and mortar type business - revenues need to be built. This is also the reason why a website needs to offer the best, most robust technology for the targeted sector or industry, which is an ongoing technology development effort that LocalUp is committed to.

So will a licensee make money the first year?

The answer is, it depends on many different factors. In most cases, it depends on the licensee’s ability to populate your site with great and complete content and market it effectively to establish consistent traffic and how quickly this can be done. Once traffic is established, advertising and online ordering revenues are generated. Typically this happens much sooner with those companies who have an existing sales/marketing/content management teams and an existing marketing arm, or those new companies who come to the table with a decent amount of capital to put behind the business opportunity and marketing efforts.

What is the Long-Term ROI?

• This is a question asked by almost any media company or entrepreneur who is interested in licensing the product. There is no concrete answer to this as it really depends on a number of factors, such as:

  • Market Size
  • Marketing Power
  • Salesmanship
  • Competition
  • Weather

We can tell you one thing though, the startup costs (hyperlink to pricing page) are relatively inexpensive and the ongoing costs charged by LocalUp are ultimately tied to the success and usage of the site. This was set up in a way to allow you to get involved and work with us at as cheap a rate as possible and use your money to take your product to market.

One benchmark you can look at to find out what the potential of the site is in your market is to find out how much in advertising is spent by all the restaurants in your market, on all products. This could include ads purchased in magazines, newspapers, radio, tv, phonebooks, online, etc.  You will want to come up with a good estimate of the total available market after conduction due diligence and you can then use this benchmark as your revenue goal for your site.

Why should the restaurant guide URL and brand be something recognizable in the local community?

Consumers are increasingly relying on the Internet for decisions about where to spend their money offline, in their local communities. In order to achieve success and to have the consumer view a site as “relevant” and “authoritative” to their community or neighborhood, it is critical to speak the local language. The site must be an extension of the neighborhood and local community to meet with success. Therefore the URL and branding should be something easily recognizable, and unique, to the community. For example:

State College, PA: The brand was finalized as “Lionmenus.com”. The home page imagery includes paw prints, the College Avenue street sign, and utilizes a blue and white color palette. “Lionmenus” is consistent with, but does not actually use, the Penn State University’s mascot – the Nittany Lion. The College Avenue street sign is recognizable to anyone in the community as the main street on campus, and the blue and white color palette is consistent with the school’s chosen colors. Collectively these elements make the site relevant to, and an integral part of, the local community. This engenders trust with users and conveys that the site is authoritative.

Furthermore, branding the guide separate from your existing brand is also crucial. Creating a brand that relates to a specific industry or purpose is key with the fragmentation of the web. When you think of sports, you most likely think of ESPN.com. When you think general search, you think of Google.com. The goal here is to brand a site locally so that when a person in your community thinks of restaurants or food, they think of your local restaurant guide. It’s a specific web product, serving a specific need, in your locality.