Michael Shapiro of TAPinto: Five Things You Need to Know to Successfully Franchise Your Business
An Interview With Teri Gault
Is your business profitable? Many people think they have a business that would be great to franchise without looking at their financials and realizing they aren’t making profit. Revenue is not profit.
The world of franchising offers a unique blend of entrepreneurship and established business models. However, navigating the franchise landscape can be daunting, especially for those embarking on this journey for the first time. There are lessons to be learned, pitfalls to avoid, and success stories to be inspired by. As part of this series, we had the pleasure of interviewing Michael Shapiro.
Michael Shapiro is the Founder and CEO of TAPinto, a network of more than 95 franchised online local news and digital marketing platforms. He is also the Founder and CEO of the Hyperlocal News Network, a licensed content management system (CMS) and back-office support system for publishers. He serves as the Chair of the Foundation for Local News, Inc, a 501(c)(3) organization that provides charitable support to improve the local news ecosystem in New Jersey. Shapiro is a graduate of Rutgers College, Rutgers University and Stanford Law School.
Thank you so much for joining us in this interview series. Before we dive into our discussion about succession, our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
Fifteen years ago, I started an all-online objective local news site in my old hometown of New Providence, New Jersey. When my son was one (he’s now 17 and he’s fine), we found out he needed open heart surgery. At the time I was an attorney in New York and I was commuting back and forth from New Providence. It really changed my whole outlook on things because during his whole first year of life, I was almost never home.
I wanted to do something where I could do something that would help the community, do something where I could see my wife and son, and do something that I was really passionate about. I started this local news site in New Providence. And within a few weeks, people in our two neighboring towns, Berkeley Heights and Summit, reached out to me and said, “Hey. We heard about this. Can you start it in our town?” And I did. And I soon found myself running three local news sites myself.
I left my job in New York to do it full time. My original vision was to grow the traffic, the content, and the advertising on those three sites. I began working on that, and over a period of time, I built them to profitability. We were able to bring on a full-time editor, but I kept getting more and more requests from people to expand to their towns. And I had to say no because I couldn’t do any more local news sites myself.
It got me thinking, how could we expand yet keep it really local? It took me a couple of years, but eventually I came up with this idea of franchising local news — looking for people that would want to start a local news site in their community as their business, where we provide the backend, the training, the support, etcetera. Fast forward to today and we now have more than 95 franchised TAPinto local news and digital marketing platforms, covering more than 125 municipalities.
Can you share the most interesting story that happened to you since you started your career?
When I was 21, I ran for mayor of New Brunswick, New Jersey. Growing up I had always thought I wanted to be in politics. But running for mayor taught me that there was so much good I could do without being an elected official. Through local news, we are able to do so much good in our communities, which has been a wonderful channel for my public service background.
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
Before we were franchising, one of our first advertisers, who still advertises with us today, told me that I was the best salesperson for my business. At the time I was involved on the content side of the business but not on the sales side. His advice caused me to turn the business on its head and handle the sales side and hire people to do the content side. That caused the business to become profitable and sustainable. It still rings true today — the business’s founder is typically the best salesperson a business has but is often underutilized (or not utilized at all) in that role.
What do you think makes your company stand out? Can you share a story?
Our business model for local news, a franchise model, is unique in the local news industry. Through franchising and creating a network of local news publishers, we are able to seamlessly collaborate on both content and advertising, enabling local news to scale and be profitable, while providing high-quality, objective local news reporting in our communities.
Ok, thank you for that. Let’s now jump to the primary focus of our interview. What inspired you to consider franchising your business, and what unique value does your brand bring to potential franchisees?
There is such a need for original local news in communities throughout the country. There are thousands of towns without a local newspaper or local news site. After I created several local news sites in my area, I realized the need was much greater than what I was able to do on my own. I thought about how we could expand yet ensure high-quality objective local news reporting in every community in which we were located. Eventually, I came up with the idea of franchising local news. This would empower people to start their own local news site in their own community while we provide the training, backend, support, and other back-office services to enable them to be successful.
Through our proprietary technology, our franchisees are able to seamlessly share content and sell marketing services into each other’s platforms. In addition, our tech stack enables our franchisees to provide unique marketing options for businesses, which results in more revenue for our franchisees and happy customers.
Beyond that, our know-how in running profitable local news sites for more than a decade, which we teach to our franchisees, is critical to our franchisees’ success.
Can you outline the most critical steps you took in preparing your business for franchising? How did you know that you were ready?
- Built and evolved the model until it achieved profitability
- Created an operating manual so that the model could be replicated
- Named the franchise, designed a logo, trademarked it, and bought the domains
- Hired franchise counsel to consult and write an FDD and franchise agreement
- Filed the FDD and registered as appropriate to enable us to be able to franchise
Once we had finished step #2, we knew we were ready to franchise but then needed to do steps #3–5 so that we were legally ready and could go to market with a brand.
What were some unexpected challenges you faced during the franchising process, and how did you overcome them?
An early team of developers promised progress on development yet had actually done next to nothing, but we had paid them in full. Because we had paid by credit card, we had a legitimate case of fraud and the credit card company refunded all of our money. That enabled us to hire new developers to develop our technology and kept us from going out of business.
How do you maintain consistency and quality across all franchise locations while allowing for local adaptations?
Our franchise agreement requires that all of our franchisees report and publish at least one original local news story per day, are objective, and follow the Society of Professional journalists ethical code. In addition, we have a strict ethics and transparency policy all of our franchisees are required to follow. We also have a full-time Director of Content to ensure our standards are upheld. Meanwhile, we provide every opportunity for our franchisees to provide suggestions and feedback for improvements of any kind. That open and honest dialogue and the thoughtful suggestions from our franchisees have enabled us to become the company we are and are really the magic behind our success.
Ok super. Here is the main question of our interview. What are your “Five Things You Need to Know to Successfully Franchise Your Business”? If you can, please share a story or an example for each.
1 . Is your business profitable? Many people think they have a business that would be great to franchise without looking at their financials and realizing they aren’t making profit. Revenue is not profit.
2 . Can your business be replicated without you leading it? A lot of potential franchisors look at their business and say that it is so easy to launch additional locations, without realizing they are the reason the business is so successful and without them running it, it can’t succeed on its own.
3 . Is there a marketplace for your business outside of your own community? Just because a business is successful and profitable in one market does not mean it will be successful in other markets. Every market is different — income levels, demographics, customer needs, etc.
4 . Do you have the financial resources to franchise including resources to pay franchise counsel, auditors, accountants, intellectual property counsel, and for marketing of the franchise? Franchising is expensive. Without the proper resources to do it, you will cut corners and that will come back to haunt you.
5 . Can you put your business and its model on paper so that if someone read the manual, they would understand your business and how to operate it? While you can replicate the model, can someone else do so using your instructions? That is critically important to determine whether the business can be franchised.
Off-topic, but I’m curious. As someone steering the ship, what thoughts or concerns often keep you awake at night? How do those thoughts influence your daily decision-making process?
As a franchised network of publishers, I worry about a publisher who may make a mistake that could hurt the reputation of our company and our other franchisees. All we can do about that is to reinforce our policies, provide the best training and continuing education possible, and have as open and transparent relationship with our franchisees as possible.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I would frankly continue what I’m doing but scale it further — local news is critical to the future of our democracy and there are so many communities that have no objective local news source. Every community in the country needs an objective local newspaper or news site to keep residents informed and involved in the democratic process and hold our elected officials accountable.
How can our readers further follow you online?
They can read TAPinto for free at TAPinto.net. They can find information about franchising with TAPinto at StartTAP.net They can connect with me on LinkedIn at https://www.linkedin.com/in/michaelmshapiro/
Thank you for the time you spent sharing these fantastic insights. We wish you only continued success in your great work!
About the Interviewer: Cynthia Corsetti is an esteemed executive coach with over two decades in corporate leadership and 11 years in executive coaching. Author of the upcoming book, “Dark Drivers,” she guides high-performing professionals and Fortune 500 firms to recognize and manage underlying influences affecting their leadership. Beyond individual coaching, Cynthia offers a 6-month executive transition program and partners with organizations to nurture the next wave of leadership excellence.
