Michael Seid's Article on a Proper Franchising Program Improperly Omits Unit Economics
An article by Michael Seid was recently posted at Franchise Chat, entitled "Developing A Proper Franchising Program". The article clearly indentifies some key issues as a company considers the advantages and disadvantages of franchising and includes a "franchisability" test as to whether a business is ready to franchise. What is not included in his list is an examination of unit economics. He mentions "sources of economic revenue" for the franchisor, but largely omits any items related to franchisee profitability at the unit level, nor did he mention franchisee return on investment.
These are important omissions!
In today's franchising, unit economics is king, in yesterday's franchising, it didn't matter. Hence in the recent past, franchising brought us flawed business models where "sources of franchisor revenue" outstripped business models that delivered positive unit economics for the franchisee.
For success in franchising in the future, "franchise startup consultants" need to start adding "franchisee and unit economics" on their punch list of things to understand prior to starting a franchise program.
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About Jim Coen
Public Profile
With over 30 years of franchise, marketing, and entrepreneurial experience, Jim Coen brings key skills to any organization that has interest in the franchise channel. Jim is a highly regarded, Sales, Marketing and Management leader who can help organizations build membership and/or expand with proven success building and leadership skills to meet or exceed the goals of the organization. Experienced in developing fast growth start-up companies and leveraging their assets and value proposition to achieve new and lasting relationships in franchising.
Coen took over as President and Chief Operating Officer of the Dunkin' Donuts Independent Franchise Owners (DDIFO,Inc.) on December 1, 2008. Prior to that he had been a director of and the Clerk for the DDIFO board since May, 2008. In 2009 Jim and DDIFO entered into an employment agreement that ran thru November 2012, Jim decided not to seek renewal of that contract.
Coen served as the Vice Chairman of the Board of Directors for the Coalition of Franchisee Associations, a group of franchisee associations leaders that includes: Burger King, Dunkin Donuts, Little Caesars, Meinieke, Super Cuts, Hardees, Subway, Buffalo Wild Wings, and JD Byrider. During his time on the CFA Board, Jim served as Co-Chaor of the Fair Franchising Committee and was one of the crafters of the Universal Franchisee Bill of Rights.
For over 6 years Coen served on the Board of Directors for the New England Franchise Association, an association that is dedicated to sharing best practices to franchise professionals in New England.
For over 20 years Jim worked with Super Coups. Super Coups was a MA based direct mail franchise business to business opportunity that has sinced ceased operations in Massachusetts
Jim successfully marketed franchises for Super Coups as well as Uniglobe Travel Northeast; a travel franchise, Merry Maids; a maid cleaning franchise, other franchise opportunities as well as Emack & Bolio Ice Cream franchise, where he was also a franchisee.
Area of Interest
Franchise Consultant
