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Franchising: Creating Partners in Growth

Partners in Growth

The following is an excerpt from my book Five Pennies: Ten Rules to Successfully Building a Franchise Mega-Brand and Maximizing System Profits.

The Importance of Creating Partners in Growth

If you think about it for a minute, any major franchise such as SUBWAY® Restaurants, Super 8 Motels®, 7-Eleven® or other well-known brands, carry some history and have evolved to represent something much more than an ordinary franchise system.

That “something more” is going well beyond the standard business of licensing locations by developing growth programs and/or tools that positively impact the entire system (such as national partnerships, accounts, or other macro-level programs). While it may seem that the scale of the franchise would naturally drive these types of programs, they are often under-developed elements.

When properly designed and executed, these programs can be powerful catalysts that turn a run-of-the-mill franchise into a franchise Mega-Brand (Mega=Great).

Strategic System Partnerships

In conducting research for my book Five Pennies, I was very surprised that I didn’t find much information about strategic partnerships in franchising. After all, partnering is very common in franchising and when done properly can put a brand “on the map”.

Brand partnerships come in all shapes, sizes and varieties, but the most important thing about them is that they need to be a good fit that helps both partners grow and succeed.

A Success Story

A great success story is Abrakadoodle®. Founded by Mary Rogers and Rosemarie Hartnett, Abrakadoodle® provides art education to children. As a startup in 2002 the brand was very small but they had big dreams and somehow convinced Crayola® to form a national partnership with them. It was remarkable to see a company the size of Crayola® partnering with a much smaller, start-up company with fewer than 10 locations, such as Abrakadoodle®.

The partnership called for Abrakadoodle® franchisees to use Crayola® products exclusively. This was a small price to pay for the national media attention it brought. The validation and association with Crayola® also benefitted their franchise recruiting efforts. Their successful relationship with Crayola® continues today and for that reason they are featured in Five Pennies as a “Best of Class” franchise for system partnerships. It just goes to show that no matter what size your company, successful partnerships can be built.

A Story of “Something More”

I, quite literally, grew up with Super 8 Motels®. As a youngster in my early twenties, I joined the company in franchise operations and spent eight years helping grow one of the largest and most iconic brands in the United States today. I am very proud to have been a part of it.

While we may not have realized it at the time, Super 8 Motels® implemented two distinct initiatives that set us considerably far apart from the competition, generated tremendous revenues for our franchisees, and were quite visionary.

Those initiatives are the national reservation system and the V.I.P. customer program. During the 1970-80’s it was unheard of to have an in-house reservation system as most lodging chains outsourced their reservations to companies that specialized in that process. The V.I.P. Club, better known today as a “loyalty program” was even more advanced and visionary for its time. Today, programs such as these are taken for granted and used by countless numbers of businesses in varying sectors. As you might expect, both of these programs were more happenstance than strategically planned initiatives, but smashing successes none-the-less and still thrive today.

National Accounts Programs

National Accounts programs are mostly associated with services and products and have been around in some variation nearly as long as franchising has. National Accounts customers are companies that are typically larger than any single franchisee can service, have specific pricing or account management requirements, or are spread out over significant geographic territories.

National Accounts epitomizes the scale that franchising affords and can be a tremendous revenue generator for both franchisees and the franchisor. Many potential franchisee candidates have come to expect these programs from the sophisticated franchise brand they are investing in. Because they bring a sense of validation and prestige to the brand (even though not all franchisees will benefit the same from the program), a National Accounts program can be great sales tool for recruiting new franchisees.

In Summary

If you truly want to create a strong national brand it’s imperative that you formulate programs that go well beyond issuing franchise agreements.

Franchisors that do not create partners-in-growth programs may be more likely to stall and reach a plateau, causing the system’s growth to stop.

By talking to your franchisees, stakeholders, suppliers, executive team, advisers, customers and anyone that comes in contact with your brand and using a little creativity, ingenuity, and vision, ideas will develop that help foster strong partnerships and national accounts which will grow.

Need some fine-tuning with your brand? Give me a shout for a free consultation.     

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