Franchises can be a monster of an operation if not run properly. A recent documentary, which aired on CNBC, showed examples of both successes and failures in the industry. Read more about this in the full article by Blue MauMau.
CNBC’s hour-long documentary, Behind the Counter: The Untold Story of Franchising, reveals some of the highs and lows of franchising company practices.
It just aired again Tuesday morning. Franchising doctors have assembled bags of parts borrowed from the corporate world to create a coherent franchise system. But what we see in the CNBC piece are moments when those borrowed parts of the Franchenstein monster do not look so good.
- The blind are leading those who can see . . . huh?!? Many franchisors, such as we see in the Cold Stone Creamery segment, do not know the cash flow or the profits of the stores in the chain. Yet they control the operational practices and direction of the stores. Scary!
- An untapped pool of deep talent: This is a high moment. Corporate chains have employees, but a franchise chain has its army of entrepreneurs. That can be a source of competitive advantage. The industry struggles to figure out how to fully tap into the strengths of talented franchise owner-operators. They embody a wealth of ability and know-how, but they are all too often limited to running local franchise shops, paying royalties and, once in a while, offering advice. A handful of chains might take a corporate approach of tapping into talent by hiring the top franchisees as officers of the franchising firm, but that practice alone doesn’t solve the problem.
- Bogus myths circulate to an extraordinary degree. Even in being extra careful in front of national television cameras, Camp Bow Wow’s CEO still dished out bad information when she said that the Federal Trade Commission doesn’t allow her to reveal store profits to buyers. It’s not just her. There’s a lot of misleading information used by the industry that can lead franchise investors into a lot of trouble. It’s a minefield out there
- Speak no evil: The dark edge of "you’re just not a team player" and silencing dissension among franchise owner-operators is that they limit managers and franchisees in their ability to make informed decisions. (See point above)
These are problems in search of answers — and future articles.
This article was republished with permission from Blue MauMau.