Franchisee: For Better, For Worse

For richer, for poorer

The idea of a franchise, to my mind, is to ‘plug the gaps’ for those who have maybe been employees and want or need or have no choice but to get out of employment by one person or company but don’t have rounded enough business skills to make a go of it on their own.

Okay, that’s a very broad generalisation but it fits an awful lot of people and circumstances: Ideally a good franchise should resemble a painting-by-numbers business option:

  • Manual
  • Systems support
  • Marketing support
  • Supplies support
  • Tool kit
  • and so on…

…to make a specific type of business an almost foregone success.

In fact I’d go as far as to say that a good, successful franchisor would definitely not want franchisees to be entrepreneurs – entrepreneurs are way too unpredictable and they’d be like herding cats for the franchisor: No. Nightmare in the making :-(

The franchising model works best as a symbiotic affair where franchisee and franchisor each know, understand and live up to what is expected of them. While they each do that to the very best of their ability it can be a marriage made in heaven… when the rules or the behaviour changes it’s likely to be the beginning of a rocky ride than can end in the ‘divorce’ courts…

Take a potential scenario

Specsavers started up in Guernsey in 1984. The timing was great:

  • Mary and Doug Perkins had sold their first Bristol venture of a group of 23 opticians for £2million in 1980 before ‘retiring’ to guernsey to be near Mary’s parents
  • Margaret Thatcher’s deregulation of marketing and promotional activities for various of the professions, including opticians, in 1984 must have seemed like an omen to the Perkins
  • They started small, outlet by outlet
  • The Specsavers group has a fifty percent stake in each of the outlets, with the local opticians owning the other half – The Perkins describe the arrangement as a joint venture rather than a franchise (I’m not clear on the difference, but there you go
  • 😉 )

Consolidation or continued growth?

To all intents and purposes, Specsavers were doing and have done well by their franchisees or JVs:

In fact, come 2006 they spent £27 million on advertising. Specsavers long-running and successful advertising campaign is famously based on the catch-phrase ‘Should’ve gone to Specsavers’ which appears on the company’s TV advertising.

But maybe there was a more sinister side to this seeming bid for not just UK but possibly world domination? Specsavers certainly, along with the other High Street players, had a go at closing down competition in the form of Glasses Direct which was selling direct on the Internet and undercutting them.

By all accounts that I’ve tracked down online it got very aggressive between the Glasses Direct MD and the Specsavers Chairman yet ended up as something of a Mexican stand off (for now, anyway 😉 …)

And that, as the saying goes, would have been that from the point of view of our little tale, except for the sting in the tail… (sorry: I just couldn’t resist…)

Franchisees’ worry about Specsavers’ next offensive

Purely as an observer of information that can readily be found online, this is where Specsavers HQ strategy seems to leave the rails.

It’ll help to bear the following in mind to grasp just why the franchisees were so up in arms:

  • The business had been built on fifty-fifty partnership (franchise) basis, with store owners concentrating on customer services, while benefiting from Specsavers’ marketing expertise and international supply chain.
  • In return for a substantial payment to Specsavers, franchisees are promised that Specsavers will not open another store nearby.
  • Specsavers, in order to beat Glasses Direct at its own game (?) now aimed to offer prescription spectacles for sale online from a starting price of £29.99, a fraction of the hundreds of pounds that Specsavers’ customers can expect

The upshot?

I don’t know but I’m sure you could easily find out if you’re interested… 😉

My point here is purely to suggest that, if you’re thinking of going the franchisee route, I suggest you make sure that you have the option to alter your terms and conditions pursuant to any changes made by the franchisor in the future :-)

Linda Mattacks - Small Business Training

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