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Don Sniegowski's picture

Leaders of the pack

I actually have three systems that I think of as bellwether franchising firms. In other words, what happens to one bodes of things to come for all of franchisedom.

  1. 7-Eleven. The Japan-based franchisor of 37,000+ locations is the world's largest franchising network. Its products and services that are moved through franchised convenience stores touch on many, many areas. For example, did you know that 7-Eleven stores in Japan double up as copy centers? Parent company Seven & I Holdings Co is famous for pioneering Deming's (more specifically Japan's kaizen system used in manufacturing) just-in-time inventory control in convenience stores. It is a bellwether for retailing, convenience stores and the franchise industry.

  2. McDonald's. Its 32,000+ restaurants lead in restaurant operations, marketing, franchise governance structures and real estate management. Each operation incorporates and epitomizes so many different products and services in so many countries that The Economist thought fit to base their purchasing price parity of nations on the price of Big Macs. The franchising firm is renown for being methodical and strategic on where and how it moves forward. Where it goes, restaurants, fast food and the franchise world tend to follow. Its competitors sometimes blame its moves for their demise. In short, all carefully watch the agile movements of this giant.

    Reality Check

  3. Subway. Doctor's Associates Inc is a bellwether for a different kind of franchisor. It has 33,000+ franchises, making its brand ubiquitous, particularly in North America. With no company-owned locations, its approach to franchising is opportunistic. It sells to markets where buyers approach them. Its franchisee cooperative, which decides national advertising, has been one of the most innovative forces on the national marketing scene. In a tough economy, it was the franchisees that pushed the sector to painfully rally around a $5 footlong price point. It is a bellwether for fast food and the franchise industry.

Can you think of others? Or reasons why one of these should not be on the list?

Re: Bellwether

A bell worn on a lead, castrated male sheep is bellwether? I say the cost of leadership is too high! There is merit to just being a plain old sheep following in the ranks. There may be no honor of being hung with a bell, but at least my stones are still hung.

Re: Bellwether

In answering who is a bellwether restaurant franchisor, Franchise Times' publisher Mary Jo Larson thinks that McDonald's is not a bellwether franchisor because they perform so well compared to the rest of the industry. She argues that Burger King could be, since it is troubled and far behind. BK will be worthy of being bellwether when it catches up to MCD. Here's the video.

I don't quite follow the logic though.

It's bellwether and has nothing to do with weather

Origin: Bellwether is a compound of bell and wether , "a male sheep, usually castrated"; from the practice of hanging a bell from the neck of the leader of the flock.

Bellwether

You've got attitude, I'll give you that. You're pretty confident that you have the gospel truth when it comes to franchises.

So why is residential real estate worthy of being a bellwether for all of franchising? Who does everyone else follow -- Keller Williams, Century 21, Coldwell Banker, or broke HomeVestors?

We can agree that McDonald's is a good candidate for a bellwether franchisor. MCD tends to lead in menu technology, operational efficiency, financing, marketing and innovation in franchise relationships -- like their ombudsman program.

I would add Yum Brands. You know what they whisper in the halls of the revered International Franchisee Association of America and the Rest of the World Too. They say, "Where Yum Brand goes, so does the rest of franchising." That's common knowledge. Besides, there are a number of KFC restaurants that actually have bells to ring when weather happens. If that isn't bellweather, then I don't know what is.

Re: Re: Tax prep franchises are bellwether franchises

Guest1 - Residential real estate is a bellwether, while REMAX is not. McDonald's is likely a bellwether for working and middle class spending, but not for franchising. Again as to your "tax prep franchises are bell weather franchises" they are not a bell weather [sic] since they are not a indicator of anything across franchising.

Re: Tax prep franchises are bellwether franchises

Hard to reply to such sound reasoning (said sarcastically).

So what franchisor do you think is the best candidate for a bellwether company, a firm that is a sort of barometer to the rest in franchising trends? Don't cop out and say that you cannot choose a bellwether company because franchising covers so many market sectors. Pick one.

Bob Frankman's picture

IAJHF Stopped the Acquisition

Mr. Hewitt has essentially queered any buy-out deal for a third party by putting the franchisee association in such an unfavorable light. - Michael Webster

Interesting take. Hadn't thought of that.

On the other hand, John Hewitt's recount of the event shows that the Independent Association of Jackson Hewitt Franchisees and its members stopped the acquistion by Liberty Tax. If its elected leadership went up to Mr. Hewitt and said that he had their full support, the acquisition would have gone forward.

I'd sure like to hear the rest of the story from IAJHF / Jackson Hewitt franchisees. 

Numbers, please

In 2009 how many units have HRB and JTX contracted by? How many units is Liberty Tax up?

If I could, I'd look it up. But I cannot find published numbers.

Listen to the field people, franchisees

Ray writes, "A franchise brand should consider its franchisee population as an invaluable asset and qualifying system. Rather many employ field staff because they deaf to anything but the wishes of the almighty franchisor."

Well said.

One point of clarification. I think Mr. Hewitt is talking about franchisees when he says franchisors won't stand out if "they do not listen to their field people." Since he is answering a question about franchisees, it is apparent that "field people" includes franchisees. He isn't talking about only listening to his field operation representatives, staff.

Liberty Tax Service is

Liberty Tax Service is expanding and adding stores and franchisees. Jackson Hewitt and H&B Block are contracting and closing stores and reducing franchisees.

michael webster's picture

Buy Outs and Franchisee Associations

I look forward to the the franchisee association's view on this matter.  As things stand, Mr. Hewitt has essentially queered any buy-out deal for a third party by putting the franchisee association in such an unfavorable light.

It is hard to understand why the association would remain silent, unless they agreed with Mr. Hewitt's assessment.

Re: Tax prep franchises are bell weather franchises

"Tax prep franchises are most likely a bell weather of firms that franchise in all sectors"

Insane and inept comment.

Ray Borradale's picture

Also arrogant and stupid

I believe one of the reasons that most companies are ordinary in this country is that they do not listen to their field people. John Hewitt

If we were to look back on many franchise system failures I’m sure we could find gold was often ignored from the front line.  A franchise brand should consider its franchisee population as an invaluable asset and qualifying system.  Rather many employ field staff because they deaf to anything but the wishes of the almighty franchisor.

Too often brands rise up to complacency where the costs of mistakes are born mostly by franchisees. Or they become greedy and focused on stripping their most valuable assets. Time and time again we see brands crumble for various reasons that cause front line customers to go elsewhere.

Tax prep franchises are bell weather franchises

Filing taxes is about as commodity as a commodity gets. It's something that every one must do. Tax prep franchises are most likely a bell weather of firms that franchise in all sectors.

Tax offices contracting?

What's happening with the number of franchises in each of these tax preparation chains? Does anyone have a count?

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