What Is A Franchise?

I have to laugh. I noticed on a forum someone asking how they can get out of their agreed contract with a national driving school franchise due to “lack of Village Idiotwork”. But that isn’t the funny part.

Someone has posted in reply that the franchise in question isn’t a “real” one, and that a “real” one would give you “exclusive rights to the brand and pupils within a dedicated area”. This is total crap!

By way of explanation, take my favourite example – McDonalds. When you take out a franchise with them (all outlets are franchises, and cost a lot of money up front) you do not have exclusive rights to the brand. You do not have exclusive rights to the customers (whatever area they’re in). You have to sell exactly what McDonalds tells you to sell, how they want you to sell it, and the customers can go wherever the bloody hell they please (which I do frequently if there’s a queue or only one zit face serving whilst trying to assemble 10 Happy Meals at the same time). McDonalds – whether it be the franchisor or franchisee – has no rights over me whatsoever. But it is absolutely a “real” franchise.

Indeed, I have complained to McDonalds Head Office before about appalling customer service at certain branches and they’ve told me that it isn’t what they expect from their franchisees and that they’ll deal with it. And they have dealt with it. Non-approved practices screw up the brand image, and it is McDonalds (the franchisor) who owns the brand – not the franchisee.

If a franchisor decides that any given area can stand another franchised outlet – and it is they who have the resources to decide, and they who also lose out if they’re wrong – then it has every right to grant such a franchise. It is inordinately difficult for a franchisee to prove that perceived damage to their business was caused by the additional franchise – and not by the plethora of competitors who are springing up all the time. In the case of driving instruction and national brands, the brand is easily outnumbered by independent ADIs who are not affiliated to any multi-car school. However, most “big brands” aim to chip away at that, and the way to do it is to advertise like no independent could ever dream of, and increase the number of cars to handle the extra pupils which result. It’s what is known as “business”.

I also note that the person who complained about the lack of work appears to be turning 10 or more hours a week – which for someone who has only been going 4 months in the current economic climate (and in East London)  is pretty damned good. If he’d gone as an independent straight away then he might now have been paying a third less for his car, but with less – possibly much less – than half of the work he currently has. You don’t need to be a genius to see which option is the better gamble as a start up instructor in an instructor-heavy location.

By definition, franchising is the use of another company’s successful business model. Further definitions include:

…an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, for example acting as an agent for a company’s products.

A franchise holder, on the other hand, is defined:

…a business or service given a franchise to operate.

It isn’t rocket science. But it would appear that even walking and chewing gum at the same time seems like rocket science to some people.

The “real” franchise imagined by the ADIs who have responded to the topic is completely imaginary, and the stuff of very biased minds. These nonsense replies are another example of ADIs with huge chips on their shoulders. Even the guy who asked the original question is clearly going to become one of them, given the fact that he is unhappy his franchise didn’t supply him with 300 hours of work within two days of signing up!

And so the cycle continues.

As an aside, although the comment has now disappeared, someone else chimed in on the same topic and dismissed all franchises as spawn of the devil, declaring that people should join a small local outfit like he did “instead”! Just another example of someone who hasn’t got a clue what they’re talking about (if it isn’t clear, a small local outfit is still a franchise).

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