New Franchise Idea: Fewer Rules, More Difference

It looks like franchises may be starting to take a closer look and listen to what local owners have to say about how the stores are run. Although not a free for all, some franchises realize the benefit of allowing owners to make stores and the products “feel more homey”.

Freedom to Alter Menus, Prices May Help Chains Compete Better Locally

Franchises are sticklers for the cookie-cutter approach. Rules and processes are set down for owners buying into a uniform system. The decor has to be set just so; the products have to be prepared a certain way; and all signage needs to be consistent.

But a crop of franchisers are taking a very different approach: They are giving their franchisees some freedom to run their own operations, much like an independent small business — from personalizing store names and menus to fiddling with prices.

Part of the strategy is to give franchisees the flexibility to compete against independent businesses. But many franchisers also see it as a way to attract franchisees, who have a growing number of businesses to pick from. More than 900 new concepts have begun franchising since 2003, according to the International Franchise Association, based in Washington, D.C. There are nearly 800,000 franchised businesses in more than 80 different industries nationwide.

But on the downside there are some who feel this way:

“There are usually strict franchise agreements so that you can maintain the integrity of the brand,” says Gary Findley, chief executive of Findley Group, a Waco, Texas, franchise developer. “That’s what you’re trying to do, and if you give people a lot of latitude out there, you lose the branding and, in my opinion, you lose value.”

So I don’t think you’re going to see Dream Dinners or Super Suppers turn over the reigns, but this may be a signal that other franchises who want a more local flair will trust in their owners to make the right decisions and give customers want they want.

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One Response to “New Franchise Idea: Fewer Rules, More Difference”

  • Quix:

    I saw the negative side of this control-freak tendency when working for a franchisor. So many franchisors have fear about diluting their “brand” by supporting innovation and adaptability on the local franchisee level when in truth they should be working more to build the brand recognition. When you have one or two franchises in a metropolitan area (or even worse in a state) there is no brand that has to be maintained so rigidly as to preclude some menu flexibility. I can understand the desire for sameness when there are many outlets in a metro market or region.

    The reason franchisees are franchisees is that they want to be their own boss, but buy into an already established back end for training, inventory, suppliers, marketing, etc. Why pay royalties just to have a certain name on one’s shingle? While “brand recognition and operational exactitude” seems important, it is not as important as most small-and-upcoming navel-gazing franchisors think it to be. Kudos to the small franchisors who are shaking things up to support their existing franchisees while using that flexibility to their competitive advantage for selling new ones. Bravo!

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