Why Franchising Remains Upside Down

There are essentially two types of franchise companies - those run by the firm hand of the founders and those run by the firm hand of the 'executive class'. Neither one really understands the other. In fact, neither one has much of a stomach for the other. And, neither one is particularly tolerant of franchisees that appear to 'not go along'. 

With rare exception, short of litigation (or a very strong association), most changes brought about by franchisees come in the form of lip service or at best, mild attempts at 'best practice' changes.

Management change is always the easiest (least intelligent) alternative to actually analyzing and 'fixing' a franchise system problem.  Why is this so? Because, by nature human beings do not want to admit mistakes or expose their short comings. (Example: franchise sales are down. Solution - hire a new VP of Franchising. But, never admit that a systemic problem might be the reason for that lack of sales. The same is true at all levels of the organization - CEO on down.) The great franchises understand, the rest (which is most) don't understand and never will. Why is that – ego + inferior skills at franchising = turmoil and/or failed systems.

Now, let's add one more critical ingredient in the form of poor franchisee selection. (Hell, you told the VP of Franchising to sell something or he was out, didn’t you?).

So what’s the net result of this franchise folly? That would be a raw turkey on the Thanksgiving table that Daddy tells you to eat. Too bad Daddy was blinded in the war. 

I thrive on helping Daddy to see.

Nick Bibby is a franchise consultant and principal of the Bibby Group.