In order to truly understand the concept of Franchising, an exploration of the basic concepts of business is required. There is no magic in that. It just makes sense in order to provide clarity about the Franchising strategy.
Franchising is not a business in itself. It is a business strategy. It’s a business system. That’s a significant distinction that isn’t always clear. McDonalds is in the fast food business – although many people feel they are really in the real estate business, while others think they’re in the entertainment business. Regardless of that discussion, they are not in the business of Franchising. Schooley Mitchell Telecom Consultants is in the business of telecom consulting. Ramada is in the business of operating properties. Snap-On Tools is in the business of selling tools. Each company uses Franchising as its strategy to penetrate and dominate the marketplace. However, their core business relates to the products and services provided to their customers, using the Franchising strategy to deliver those products and services in a consistent manner. A more in depth discussion of the Franchising concept will follow, but first we need to delve into the basic concepts of business.
If someone says to you that they’re in the business of Franchising, they don’t really get what they’re doing. It’s all about the customer, and if the focus is not on the customer and their needs, then something is awry. Customers don’t need a Franchise. They need hamburgers, telecom consulting, hotel rooms and tools. So therefore Franchisors are not in the business of Franchising.
It has to be about the customer doesn’t it? After all, the customer pays for everything. They pay for salaries, they pay the rent