Less Brand Control
A FRANCHISOR POV
What Happens When You Lose
Brand Control
WHAT IS LESS CONTROL?
Compared to organic expansion where you own every location, when
you franchise you are giving up some control to your franchisees who
will own and operate their franchised locations.
The first and most significant disadvantage of a franchise is the fact that
the franchisee has no control of the business or how it is run (or very
limited control). The rules of the business are already established and
part of the franchise agreement. How the business operates is set out by
the brand of the franchise and it is very rare that a new franchisee will
be able to operate outside of these
borders.
RISKS IN THE FRANCHISEE MODEL:
These were the three models that McDonald’s has used to run its
system operations around the world. While it has brought the brand
immense success, this business model is not without risks.
McDonald’s system has more than 90% of its operations being
carried out with the help of franchisees. This leaves the company
heavily dependent on the franchisees. Moreover, the level of control
and participation that the franchisees enjoy is very high. This leaves
the company with limited control and influence over franchisee
operations. Giving the franchisees enough scope to run their own
operations and make their own decisions is a good practice with its
own benefits but since the company’s influence gets limited, it also
presents certain kind of risks. Now, the company’s success depends
heavily on cooperation of the franchisees including the conventional
franchisees, development licensees and the affiliates. Their financial
success is also important for the success of the company
(McDonald’s Annual Report, 2017).
REFERENCES:
https://landor.com/losing-control-good-thing-comes-brand-management
https://www.thecompanywarehouse.co.uk/blog/advantages-and-disadvantages-of-a-
franchise
https://notesmatic.com/2019/01/mcdonalds-business-model/
HOW THIS ISSUE AFFECTS
YOUR FRANCHISING RELATIONSHIP.
Less control of my brand may affect
my revenue because the impacts of the franchises will still
affect me. It is risky to have a less control of your franchise
but it is also a good thing to address some issues that either
one of the franchisees can solve. For me as a franchisor, it is
ok to lessen my obsessive control in my brand because it is
a good way to help the franchisee to think out of his/her
box independently. It is also a good idea to have a better
partnership. On the other hand, for me this is can affects
how I should put my trust for those franchisees who will I
less control of my brand, it should a qualifications before I
give them the authority to be independent in my brand.
WAYS ON HOW TO SOLVE THIS FRANCHISING ISSUE
Be creative, remember that your franchisees will often reassess their
investment in your franchise model and they will want to be reassured
that they are getting their money’s worth. You therefore need to
demonstrate that you are constantly coming up with innovative ideas for
the growth of the brand.
Communicate effectively, Rather than just trusting your own opinion
on matters, seeing the situation from multiple angles guarantees a more
well informed and less risky decision. The best franchisor/franchisee
relationships involve frequent communication and the discussion of
ideas. Regularly pick up the phone and check up on how your
franchisees are doing too.
Form trusted partnerships, We’ve all heard of the saying, ‘It’s not what
you know, it’s who you know’. Having connections and contacts in the
business means you are more likely to benefit from added perks like
discounts. You need to keep on top of what your franchisees need to run
their business successfully. It’s good partnerships that make the
franchise more valuable and, in turn, enhance the satisfaction and
security of franchisees.