Room for Improvement

How to approach franchisors with new ideas.


Room for Improvement

The term ‘innovative franchisees’ is not technically an oxymoron;there are more of them around than, say, skinny sumo wrestlers. Still, they’re not the norm.

Franchising by its nature discourages innovation on the part of franchisees, who are required by their franchisors to follow very specific policies and procedures spelling out exactly what they will sell, how they will make or deliver it, and even what their stores or restaurants will look like.

That consistency creates a comfortable, trusted experience for consumers. It also enhances the odds that franchisees will succeed, allowing them to leverage a tested and proven business model.

Still, even the most rigorously disciplined franchisors remain hungry for new ideas. If you’re a franchisee longing to put your own imprint on your business, or a potential franchisee wondering if you’ll be able to do so, you do have that opportunity. Here are a few ways to improve your odds of success.

How to win over your franchisor

Master the basics first. Franchisors aren’t going to be interested in hearing ideas from brand new franchisees. While this shouldn’t curb your enthusiasm, make sure you’ve learnt to execute your franchisor’s existing business model before suggesting ways to improve it. A successful franchisee running a profitable and well oiled store will have more credibility with franchisors than a struggling one.

Review your franchise agreement. It will tell you where you can and can’t try out new ideas. The point of a franchise is to have standardised operations, products and services. If you play with the recipe, you could cause damage to the brand’s reputation. Check the fine print so you don’t land yourself in hot water and risk being de-franchised.

Contact your franchisor. Even if you’re fairly sure your idea won’t violate your franchise agreement, it’s a good idea to run it past your franchisor anyway. Your franchisor may have tried your idea in the past and could save you from heading down a dead-end street.

Do your homework. Put your idea down in writing and do thorough research to test your idea. This is especially important if you’re suggesting something that would impact all franchisees. Create a well thought out business plan before approaching your franchisor so you have all the answers ready when the questions come.

If your idea is really good, you may be able to get your franchisor to embrace a new product or service you’ve developed. Even at McDonald’s, many of the best-selling menu items were created by franchisees. But the odds will be long, as will the wait while the franchisor evaluates your concept.

Good ideas go large

Some of McDonald’s super-successful concepts have come from franchisees.

McCafé: This is a coffee-house style chain owned by McDonalds, but was created, tested and launched by McDonald’s franchisee Ann Brown in Melbourne Australia, 1993. The chain caters to espresso coffee lovers. Reports suggest the chain now generates 15% more revenue than regular McDonald’s.

Mc-Cafe

Filet-O-Fish: This story goes back to 1962, when Cincinnati McDonald’s franchisee Lou Groen developed a product for his predominantly Roman Catholic neighbourhood. It became so popular it was integrated into all McDonald’s menus.

Fillet-O-Fish-Burger

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