In 2008, suburban New Jerseyans Mike and Lauryn Shapiro saw their 1-year-old son come through risky open-heart surgery successfully. Filled with gratitude, Mike scrapped his career as a litigation attorney in Manhattan and he and and wife decided instead to pursue a future built around social good. The Shapiros put $250,000 of their own money into starting digital newspapers in New Providence, N.J., where they lived, and two neighboring communities that would be “high quality, objective, and non-partisan.”
From those sites, the Shapiros’ The Alternative Press grew into a network spread through suburban Jersey. Most of the sites were converted to franchisees, starting in 2012. Today the network, rebranded as TAPinto in 2014, has grown to 57 franchisees in Jersey and suburban New York State.
A typical TAPinto owner is Jackie Lieberman, who converted the existing Westfield, N.J., site to a franchise operation in 2012. A former magazine editor, Liebnerman says her TAPintoWestfield produces 100,000 hits monthly in a community of 30,000 and makes more than $100,000 a year.
In this Q & A with Street Fight, Mike Shapiro tells how TAPinto continues to grow — it hit a record 713,308 unique visitors in September — in a hotly competitive market for community news:
Each of our sites is independently owned and operated, so the content itself is produced by each franchisee. At TAPinto, we have several full and part-time editors who review all news stories post-publication and provide feedback to our franchisees about their writing. Our editors also copycheck the content being produced. This enables us to have original local news reporting taking place on a daily basis for our sites, with oversight to ensure quality, at an affordable cost.
Do individual sites in the network share editorial content and other services to cut costs?
Key to the model is sites being able to share content with a click of a button. They can also sell into each other, maximizing the network effect both on the content side and the advertising side. This creates efficiencies throughout the network.
Does the network help to attract advertising that individual sites might not be able to do?
Absolutely. Many businesses want to reach outside of their hometown location and our network allows them to do so seamlessly. Many businesses choose to advertise on more than one site. And we have several regional players advertising on many sites.
What have you learned from your franchise-type operation? What do the franchisees deliver that a conventional network can’t deliver?
As we continue to grow, we are becoming better at choosing who will be successful franchisees. We are also learning what policies and procedures need to be in place to ensure quality standards throughout the network. Thanks to our proprietary software combined with our franchisee network, we are able to achieve scale on both the content and the advertising sides of the business.
Do you set specific targets for a franchisee?
We have suggested targets but not required targets.
What does your pre-launch training program for a new franchisee include?
We provide thorough editorial, site, social media and sales training. We provide this training live, through PowerPoint and through video, so all training is presented in three different ways for each franchisee. We also have full-time staff to provide additional training and support post-launch.
If the franchisee doesn’t meet one or more targets, what do you?
We provide feedback to them, suggestions for improvement, offer additional training, and in some cases even help them recruit a partner to join their business to help them.
Do you and your wife, Lauryn, actually monitor all 57 franchisees?
No. We have full-time and part-time employees who provide support for our franchisees. I spend most of my time meeting with prospective franchisees and providing the sales training, as well as doing regional sales. My wife got the entrepreneurial bug herself two years ago and started her own personal training business so she focuses her energies on that.
What is the hardest objective for a franchisee to reach?
Sales. Most people who have the journalism abilities do not have the sales background/skills. So we recommend that they partner with a salesperson, though good salespeople are hard to come by.
Do you ever reject any candidates as franchisees?
Yes. We actually have a Prospective Franchisee Committee, composed of franchisees, who meet with and approve or reject candidates. The Committee has total say in whether a candidate is approved to be a franchisee.
How much capital does the franchisee have to put up to get started? What is your contribution to a franchisee?
There is an annual fee of $4,250 to $6,750 depending on population. There is also media liability insurance, which, if done through our carrier, is currently $290 per year. We provide the site, hosting, email accounts. We provide all of the training. We do the franchisee’s billing and credit card processing of their advertisers. We also provide everything from an editable media kit to contracts, to everything in between. The franchisee is responsible for reporting the local news in their town and doing the ad sales to local businesses.
What talents make a franchisee most successful, based on your experience?
Being connected in their town; having a good business head on their shoulders; and being passionate and dedicated to their community.
You have outside investment in TAPinto. From whom and how much?
We have had minimal outside investment (less than $200,000) from a few individuals since we launched in 2008.
Is TAPinto profitable?
TAPinto itself is currently not profitable since we made significant technology investments both last year and this year. We project profitability for 2017.
What about financial performance of your franchisees?
Each franchisee is independently owned and operated and we are not privy to their expenses. But I’d say based on their revenue, the great majority are profitable.
What does your new technology permit you to do with your network scale?
Our sites are able to share stories and customize them for their town without impacting any other site’s version of the story. On the advertising side, our billing system allows us to automatically split out payments to our franchisees, including on contracts for multiple sites.
How much bigger can TAPinto grow, Do you have expansion plans beyond New Jersey and New York State?
TAPinto is fully scalable and can go national. To do so, we would need a strategic partner who can help take us national.
Do you have a corporate staff?
TAPinto has four full-time and two part-time employees. Two full-time and two part-time employees are the editors we spoke about earlier. The other two full-time employees are social media experts who train our franchisees, provide social media support and also handle operational needs.
Finally, is the franchise model the one that you believe will rescue community journalism long term?
Yes. Through franchising we are able to launch high-quality online local news sites anywhere in the country while keeping the site truly local for their community and building a profitable business opportunity for the right candidates. Our model is scalable and sustainable.
Tom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.