Do Business Well

Early business format franchise concepts emerged primarily in the quick restaurant domain, simply because this type of business with its limited menu, standardised operating procedures and mass market appeal was ideally suited to large scale replication. Meanwhile, however, many other industries have succeeded in streamlining their concepts, thereby making them franchiseable. Small wonder then that at the beginning of the new millennium, franchising had established itself in the United States as a dominant force. Continue Reading »

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Redundant military personnel, flush with cash received as termination pay for services rendered to their fatherland and anxious to make up for lost time, were roaming the streets, eagerly looking for ways to earn a good living. Not surprisingly, these people were reluctant to return to colleges or universities to complete their studies, which had been interrupted by government’s call to arms. They sought realistic ways to fast track their civilian careers instead.

But while these men and women possessed the required maturity and adequate funding to start small businesses of their own, they frequently lacked the skills they would need to survive in the hurly-burly world of business. Continue Reading »

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The concept of franchising as we know it today originated in the United States where in the 1860’s, the Singer Sewing Machine Company established a franchised network of dealers. The rationale behind this move was compelling. The emergence of mass production techniques enabled Singer to produce more sewing machines than they could ever hope to sell within their traditional markets. Suddenly, national expansion was not only a viable option, but had in fact become necessary to protect market share. Continue Reading »

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No franchisee can hope to succeed in a franchised business unless the underlying franchise opportunity is inherently sound. And although this is a prerequisite, it is not enough. No franchise offer should be seen as a passport to business success that comes complete with built-in guarantees. The best a franchise can ever be is a blueprint that has been tried and tested by the franchisor and has been proven to work.

Whilst the blueprint must be followed by the franchisee, it will be his investment, his hard work and his dedication to the business that will ultimately determine the success of his business. Prospective franchisees should also ask themselves the following questions:

• Am I suited to self-employment? It is important to remember that a franchisee is not a glorified manager. He has to take control and accept responsibility for every facet of operations. The proverbial buck will stop with him and mistakes will generally be for his account.

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When assessing the viability of an existing business for franchising, several critical factors should be considered, for example:

• Does the business operate in a large and growing market? Market demand must be sufficient to sustain a franchised network, or even more than one franchise, since competition will inevitably enter the marketplace.
• A large market will also contribute to promising margins, making it an attractive business opportunity for prospective franchisees. Also, the market must provide room for growth, for the benefit of the franchisee and franchisor.
• Can growth be sustained? The market must have the potential to grow for a long period since the franchisee usually signs a long-term contract and the franchisor has to build a solid infrastructure to support the franchised network. For this reason, fads are not franchiseable.

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Franchising has many outstanding qualities and its merits are not under dispute. Unfortunately, this has persuaded some proponents of the concept to overshoot the mark somewhat by recommending franchising as a cure-all for all business ills. It is not! Whilst business failures in franchising are relatively rare, they do occur. When this happens, casual observers are quick to blame franchising. Should they bother to carry out a proper post mortem, however, they would soon realise that in most instances, it was not the concept of franchising that should shoulder the blame for the business failure but its faulty implementation. Continue Reading »

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• Aggressive brand building. Marketing efforts in the widest sense of the word must surely rank among the franchisor’s prime obligations. Market research and product development are of equal importance. All these activities, if performed diligently, will result in tangible benefits for franchisees and go a long way towards ensuring harmonious relations.
• Clear channels of communication. Franchisees hate it if they have a problem and cannot reach anyone who has the knowledge and / or the necessary authority to offer an immediate solution, as this can cost them business. They expect a system to be in place that is capable of taking care of all foreseeable problem-solving needs, promptly and efficiently. Moreover, franchisees like to be kept informed of new developments within the network before the public gets to hear about them. Few things can be more unsettling for a franchisee, especially if he is relatively new in the business and not all that sure of himself, than to be told by a prospective customer about new developments within his network of which he had no prior knowledge.

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What franchisees expect from their franchisor

More often than not, budding entrepreneurs choose the franchise route because they want to be in a business of their own without being alone. They are quite happy to pay the initial and upfront fees prescribed by the franchise agreement as long as they receive perceived value in return. And they willingly follow the guidelines contained in the operations manual as long as they are up to date, relevant and practical to implement. In return, they will expect the following from the franchisor:

Full disclosure. The franchisees will want to know the true potential of a site. Continue Reading »

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Franchising is all about working together towards a common goal. On the surface of it, this appears to be the building of the brand for mutual financial gain - what could be simpler than that? Further investigation reveals, however, that in reality, matters are a little more complex. Granted, both the franchisor and his franchisees want to build wealth for themselves and their families to enjoy. Beyond that, the franchisor and his franchisees have dreams that have the potential to take them in different directions.

Franchisors will want their brand to dominate the landscape of every city and town; their gut feel may tell them to do whatever it takes to realise this dream. Franchisees, on the other hand, are likely to be more concerned with the short-term profitability of the outlet they own. They tend to overlook the fact that it is better for them to belong to a strong network Continue Reading »

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The quarters have an old industrial feel, with gritty exteriors that belie the company’s sleek online identity’ (1999: 3). Many other ‘new economy’ employees work in call centres that have been dubbed ‘the new sweatshops’ because of pressure to work as quickly as possible under electronic surveillance that monitors, for example, the number of customer emails responded to per hour. In these service-intensive organizations, the power is in the hands of lower-level, front-line employees, upon whose handling of customer services managers must depend for the achievement of organizational objectives. As Piercy notes, ‘Too many employees who deal directly with customers are damaging the product, service or corporate brand every time they open their mouths’ (2000: 187). This means that intend marketing needs Continue Reading »

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