Mythbusters: There Is No Innovation in Franchising

One of the most common misconceptions about franchising is that there’s no room for innovation. In this article, we debunk this myth and use real life examples to prove that there is in fact innovation in franchising.

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You might think that franchise innovation isn’t really a thing, but you’d be very wrong. The reality is, the world’s leading franchises were built on innovative business models and have had to constantly adapt to stay at the top of their game. Did you know that one of most innovative and iconic products at McDonald’s, the mighty Big Mac, was actually created by a franchisee? The reason why massive international franchises, like the golden arches, Dunkin’ Donuts, KFC and Kumon, to name but a few, have stayed in business so long is because they recognise the importance of innovation.

Reasons why there is innovation in franchising

1. The franchising community shares the same goal

A franchise brand can only thrive when the people involved work together. In other words, the franchisor needs to trust the franchisees’ ability to operate their businesses successfully, and the franchisees need to trust each other to not do anything to tarnish the reputation of the brand. The franchising community and operating under a larger brand stimulates innovation across franchise locations. Having a vast network of franchisees all with a shared vision and goal inspires innovation as the franchise brand’s success is driven by the success of each franchisee.

“For us at Soccer Shots, innovation isn’t ‘owned’ by one person or a particular department… We have 120 franchise partners, thousands of coaches and hundreds of thousands of Soccer Shots families. We’re systematically tapping these resources to mine small and substantive ways we can innovate. Additionally, we look beyond our own system and industry to understand what’s working in other franchise systems and industries to determine what might drive our business forward.” - Justin Bredeman, CEO of Soccer Shots

Another great example of this is with B2B franchise Recognition Express, where the creativity of one forward-thinking franchisee benefitted the whole franchise brand. He thought that if he could make a badge look three-dimensional, the franchise would have a better product that they could charge more for.

“He essentially invented ‘doming’, which is just a resin and a hardener combined over a piece of plastic. This allowed us to actually produce a badge in full colour. That is innovation and it works within the confines of the franchise. It works for both parties.” - Nigel Toplis, the Managing Director of the multi-brand franchisor, Bardon Group

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2. There is freedom for franchisees to try new strategies

While, on the whole, franchisees have to operate their businesses according to the guidelines outlined by the franchisor, this doesn’t mean there isn’t room to get creative and alter aspects of the business operations. As long as these changes won’t harm the entire format or have a knock-on effect on the success on the business model, many franchisors decide to support franchisees with the innovative ideas they come up with.

This was the case with an Esquires Coffee franchisee, Steve Prime. He decided to change the opening hours of his coffee shop franchise so he could serve customers at the Coventry transport museum that were attending open mic and comedy nights. The BFA Young Franchisee of the Year’s idea was replicated by other franchisees.

3. Technology advancements have made recruitment and training easier

The most successful franchisors are those who understand that their franchisees are their greatest assets. So, lots of innovation in franchising is related to investing in the franchise team and giving them the support they need to operate their own profitable franchise units. Take, for example, cleaning franchise MaidPro, which introduced MaidPro University to give employees the best possible training, and dessert franchise Kona Ice that created video tutorials to provide support and collect feedback.

“We are a growing company, so we are continuously hiring and training new employees. MaidPro University has helped us tremendously, allowing us to train our employees in the most efficient, informative and engaging way.” - Yohanni Hedges, owner of a MaidPro franchise in Northwest Indiana

Innovating in franchising also extends to how franchisors recruit franchisees. This incredibly important process can be long and expensive if not done right. Iain Martin, an International Franchise Consultant at The Franchising Centre suggests how the franchising world has welcomed the latest technological advancements on a franchisee recruitment front:

The traditional CV could be on the wane, to be replaced by video. In addition, artificial intelligence could play an increasing role in the candidate interview process.

4. Franchisors hold regular meetings and events

The majority of franchisees have an entrepreneurial spirit and are eager to suggest ways that the brand can improve and grow. Therefore, many franchises hold regular meetings where franchisees can share their ideas. Based in different locations, it’s likely that some franchisees will have very different experiences. By frequently having the opportunity to compare these, it can help the franchisor change processes to benefit the wider franchise brand.

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5. Innovation isn’t always overt in franchising

According to Nigel Toplis:

A lot of the innovation that happens within franchising is almost what I would call ‘incidental innovation’… It happens almost on a daily basis. Franchisees will come to us, say ‘we have done it this way and it seems to work better for us’ and we will say ‘we should do it that way’.

This was the case with Zip Yard, when one of the franchisees offered to provide email marketing services to the rest of the network and another franchisee used Twitter to market their business.

Innovation is inherent to the franchise system

By now, you should hopefully agree that the notion there is no innovation in franchising is just not true. We’ve used lots of examples of franchises proving this, but this is only just the beginning. There are so many other ways in which innovation in franchising is occurring across the globe, and that contribute to franchising being such a robust and lucrative industry.

Enjoyed this? Check out another article in our ‘Mythbusters’ series that discusses the common misconceptions about what makes a successful franchisee.