September 19, 2007
Freedom Franchising
Posted by Harwell Wells

The WSJ had a story yesterday on a new movement: "Freedom Franchising."  Apparently competition for good franchisees has become so intense in the past few years (with more than 900 franchise concepts rolled out since 2003) that some chains are taking a new tack:  giving their franchisees more leeway to run their operations as they see fit.  Great Harvest Bread Company, for instance, is allowing franchisees to decide what items to put on the menu and where to buy supplies, instead of restricting their menus or the suppliers they have to use.  I'm going to assume, though, that all Great Harvest franchisees still have to sell bread.  (Great Harvest has also, BTW, trademarked the term "Freedom Franchising").

I was intrigued by the article and premise, especially after teaching the Krispy Kreme case study from the Smith & Williams casebook, but I still wonder how a franchise can succeed if its stores aren't (pretty) uniform.  The article also quotes the head of the Beef O'Brady chain of sports bars.  The chain has been giving its franchisees freedom to set prices, but "[a]s we grow," he said, "we do feel that we need to be tighter and do more create a clear brand for our guests so that they know what to expect."  Isn't a "clear brand" and uniformity the whole point of a franchise?

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