Have you ever been disappointed by a well-hyped movie? How about a disappointing meal in a new restaurant that has rave reviews by the foie gras crowd? One size does not fit all. Popularity depends on tastes and attitude, who benefits and who does not. Popular franchises follow the same path; they may be popular with the public but not necessarily with the franchisees.
Popular Franchises – Two Points of View
The franchisor can usually ride a wave of popularity with his or her product or service into higher and higher start-up costs. This is great for the franchisor. It does two things: makes the franchise more attractive to potential franchisees and strengthens their bargaining position. Neither adds to the franchisee’s bottom line. In such a situation, popular franchises are riding the crest of the wave. The question becomes: will the franchisor use the popularity to expand the marketing and brand strength of the company or simply use the added profits for personal benefit?
If personal benefit is the ultimate goal, the franchisee will suffer. It’s only a matter of time. With luck, the popularity of the brand will keep the product or service going with the public and what may be lost by a franchisor’s picking distributor’s pockets can be made up in volume — for a time. If the marketing and branding are not sustained, popularity decreases with the public, followed by profit. Once the wave hits the beach, the franchisor may try to make up for dwindling profits by increasing established franchisee fees, marketing contributions or hiking up the percentage of profits due the franchisor. That’s totally the wrong direction.
A Morality Play
The best of popular franchises go for the long game. Smart and ethical franchisors recognize that keeping the wave of popularity at it’s crest is the best plan of action for both the owner and their franchisees. Popular franchises should work to sustain their popularity. That means making the brand as popular with the public as possible, making the franchise as profitable for the franchisee as possible and expanding brand loyalty by fine tuning the marketing; keeping the franchise fresh and exciting. By keeping their eyes on the reasons behind the popularity of a franchise, the franchisor can tweak the brand carefully to fit a wider audience, keep up with societal changes, demographic changes and continue the success. Stopping for even a short time to bathe in the popularity damages the brand and hurts franchisees.
By following the pattern of popular franchises, in both good and bad economies, a potential franchisee can tell if the franchisor has a continuing passion for the company. If the brand stays fresh, the marketing plan continues unabated and the public stays loyal, the reviews are reliable and the meal will be satisfying.
