Internet Cafes, Business, & Gaming Centers Boast Higher Customer Loyalty & Profits

Franchisors are always looking for that magical ingredient to propel their business toward greater profitability. In 2005, many are finding magic in the Internet, as email, laptops, PDAs, SmartPhones, and other mobile communications devices become a regular part of both business and personal life.

Whether an Internet cafe, providing free Wi-Fi (wireless networking) connections to its coffee-drinking, croissant-munching clientele; a gaming cafe, catering to younger customers unable to afford the hottest new games or pricey systems to run them; or the Internet business center, where small and home-based entrepreneurs can use expensive software, fast machines, and related printing, copying, and communications services-there's plenty of opportunity out there to profit from using the Internet and Wi-fi to serve an increasingly mobile, computer-literate public.

The industry is still relatively young-and ripe with opportunity. Popular use of the Internet is only about 10 years old, although the first Internet "cafe" reportedly appeared in 1991 in San Francisco: SFnet, a network of 20 coin-operated computers with a dial-up Internet connection over a 2400-baud modem. We've come a long way since the Internet jukebox, and it may seem that Internet cafes and gaming centers are springing up faster than IPOs during the dot.com boom. But as they catch on with the general public, there's ample room for growth.

Just ask Debora Shockness, a 20-year IT veteran. In September 2005, she opened the first Screenz Computing Center, in Farmingdale, N.Y. "Screenz provides a great working environment where people can rent access time using the latest software and peripheral equipment so they don't have to purchase and install them on their home computers," she says. Customers "can do just about anything they want on a computer-from searching for a job and printing a resume to scanning and manipulating photos to downloading music for their iPod."

Or take Krystal, the mini-hamburger fast food chain founded in 1932, which launched its first "Krystal Hotspot" in 2003. Customers at an increasing number of its more than 450 restaurants across the southern U.S. (185 franchised) can use its hotspots for free Wi-Fi Internet access.

Wi-Fi service is sprouting up everywhere. McDonald's offers it under a "Bites or bytes, we do both!" slogan. Truck and rest stops offer it for travelers. Coffee shops such as Starbucks, Javaology, It's a Grind, and Bad Ass Coffee provide it. Panera Bread and other sandwich and food franchises have added it to their menus.

Another "hot spot" in this booming segment is not business or food, but play: computer gaming cafes or centers. What began as an addition to the coffee and computer-based Internet cafe has morphed into a segment of its own, offering state-of-the-art computers and consoles and the newest games, set up for individual or group play in a retail environment.

In the second half of 2005, the CyberLAN Cafe & Gaming Center was busy gearing up to sell franchises. In the interim, the company was offering a smaller, lower-cost version, the CyberLAN Signature Center, with an option to convert to a franchise when the legal steps were complete.

But for all those customers who travel with their own Wi-fi-enabled laptop, PDA, or cell phone, there are dozens more who don't. For this market, some forward-thinking entrepreneurs are opting for the Wi-fi kiosk. While these are found primarily in airports and busy hotels today, don't be surprised in a few years to see these Internet kiosks in malls, large retail chains, convenience stores, and other high-traffic centers, providing access to email with the swipe of a debit card-or perhaps a handful of quarters.