Can Proctor & Gamble Succeed with Jim Amos at the Helm?

This news site’s recent lead story about soap giant Proctor & Gamble wading into the business of franchising with a “Mr. Clean Carwash” and dry cleaners using the Tide trademark, raises the question whether a large corporation can become a successful franchisor by buying and rebranding an existing system and hiring leadership from the outside. Further, P&G’s engagement of Jim Amos, an accomplished franchise salesperson with a spotted history, raises both special and general issues.

The idea that a big corporation with established products and entrenched corporate culture can make it in the franchise business has been tried before. Sometimes it is successful, sometimes not. A couple of decades ago, Union Carbide Corporation, then the number 7 Fortune 500 company and a worldwide leader in the production of chemicals, decided to go into the business of franchising marble care. Marble, used extensively in office buildings, hotels and residences, requires both expert care and specialized chemicals. The marble care industry, at that time, was factionalized—tens of thousands of independent operators, often mom and pop businesses, used their own private special-formula chemicals and techniques to clean and polish marble and other stone surfaces. Predictably, results varied. Why not create standards based upon measurable performance, use standardized chemicals, and achieve a uniform result that could be applied in Connecticut as well as California, Union Carbide asked? Brand it all with the Union Carbide name, and it would appear to be a sure success.

In concept, it was brilliant. In execution, Carbide stumbled badly.

As the venture unfolded, Carbide’s “proprietary” chemicals could be purchased off the shelf; the results were inconsistent; and the entire venture was doomed because of internal Union Carbide deadlines and benchmarks. The project crashed, the company settled a host of lawsuits, by unhappy franchisees, and, for unrelated reasons, Union Carbide went out of business some years ago.

With Proctor & Gamble, we have one of the country’s oldest continuously operating public corporations, with a somewhat rigid and old-fashioned corporate culture, entering into franchising. Will it be able to inspire and lead franchisees? Will it have the flexibility to move quickly? Will franchising be a business that P&G truly cares about, or will it be only an appendage to the big business of selling soap and toothpaste? Hiring Amos to lead the effort is a dubious call: He’s reputed to have a style of bullyism with franchisees, and was found liable for misrepresentation in connection with selling Sona Med Spa franchises. He has no record in the car wash or dry cleaning fields.

Bottom line -- It’s the old question: Are franchise systems made or are they born?

That is, can an established company like Proctor & Gamble extend its “Mr. Clean” brand name by cobbling together an existing car wash franchisor; a veteran, but aging and shadowy leader; and a lot of dollars to make a franchise system? Or do franchise systems have to be built from the bottom up, from some inspired entrepreneur’s discovery or invention of a gap needing to be filled?

About the author: W. Michael Garner is a partner in Dady & Garner, P.A. and has practiced franchise and distribution law for over thirty years. He is regarded as one of the nation's premier trial lawyers and legal writers in the field.

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Related Reading:

• Controversial Amos Leads P&G to Launch Mr. Clean Car Wash Franchise Nationwide
• Mr. Amos's bio from P&G can be accessed here
• American Public Radio's Marketplace interviews Don Sniegowski on Mr. Clean (mp3, podcast, 2nd story at about 3 minutes)
• Sona MedSpa Guilty of Negligent Misrepresentation
• The Sona MedSpa Tragedy Continues
• Sona MedSpa "The Rest of the Story"
• Jim Amos of Tasti D-Lite, MBE, Brice Foods (Forum)
• James Amos To Become Tasti D-Lite CEO
• A Critical Look at Franchising Healthcare in Kenya
• Brice Trial Appeal and Jim Amos (pdf)