I often hear clichés being passed around the franchise industry extolling a given brands partnership between franchisor and franchisee.
There are in fact many, many franchise brands that live up to this credo every day and work diligently to improve franchise owner profitability and brand equity......
There are in fact many, many franchise brands that live up to this credo every day and work diligently to improve franchise owner profitability and brand equity. There also seems to be no shortage of franchise companies whose main concern is building their own short-term profitability and market value at the expense of their franchisees. So, how do you tell them apart and just how important is this differentiation as long as you are with the “Hot Brand of the Day”?
There are some absolutely great books that speak to this subject, but one of my longtime favorites is the story of the birth and growth of McDonald’s: Behind the Arches, by John F. Lowe. The gist of the story is that from the beginning, McDonald’s consistently focused on driving top line revenues at their restaurants while driving down operating costs. They built revenues through great operations and by partnering with committed and hardworking franchise partners as they grew their brand. Over the coming years, McDonald’s singular focus on the success and profitability of their franchisees and the growth of their brand created a powerful competitive advantage, which they exploited year after year. Eventually the gap between McDonald’s and everyone else in the industry grew larger and larger and was a key driver in the eventual domination of the ubiquitous brand we know today. I will never forget this story of how important it is to know who you are and what you stand for, and then to commit execution of that singular focus every day.
Another place to begin evaluating the commitment of a brand is to evaluate the strength and depth of resources of the senior management team and ownership group. It takes an incredible amount of capital, both human and financial, to build a world class company in any business. The franchise industry is no exception to this rule. Successful brands have solid financial backing, and do not chase franchise fees in order to fund their franchise training, operational support, research & development, legal and all of the other various functions required of a growing company. A company that is chasing franchise fees to support their growth will be forced to make short term decisions and they eventually hit the proverbial wall.
The long-term success of great brands must be built on a clear, simple vision that everyone can understand and measure themselves against. While the hot brand of the day will always make today’s headlines, true success is built over time and measured in decades. I have had the great pleasure of working for a number of great business pioneers and innovators in several different industries over the years. Each and every one of them was incredibly focused and highly committed to the long term, with a deep understanding of their business. My dad always told me to never bet on a horse to do something it’s never done before. It’s not that betting on the longshot never pays off; it’s that depending on hitting home runs every time at bat is not a sustainable strategy.
When you are considering where to invest your time, money and energy, look deeply into the core values and resources of the brand. Truly successful brands rarely happen overnight or by accident. Great enduring companies are built by great people, stone-by-stone and step-by-step, working together with a clear vision and purpose. It doesn’t happen every day, but when a great brand comes along with great values, visions and a clear compelling mission, join them for the long haul and you will be rewarded manifold!
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David Bloom currently serves as Senior Vice President of Strategic Development for Famous Brands Intl. David has a track record of accelerating the growth and business operations of a wide variety of brands and business models both nationally and internationally. Prior to joining Famous Brands, he was responsible for developing ground-breaking strategies, and executing accelerated development plans and programs across a number of brands in a variety of industries worldwide.