Local And Social On The Rise
In the timeless biblical story of a young man that bravely takes on an opposing foe’s giant, the odds are clearly not in his favor, yet he faithfully engages in the battle. The only reason we are familiar with this story is because the young man, David, won the battle. Each year hundreds of entrepreneurs set forth in battle against a plethora of larger, better capitalized and well-known brands already in the market and many succumb to the battle, giving way to the daunting odds against them, either through exhausted capital or failure to differentiate themselves. Yet, there is a rise in the value of concepts that are local and that connect with us socially, which may be improving the odds dramatically. The tsunami of millennials who are not beholden to decades of advertising by the incumbent brands is opening the door and providing a path to sustainability that should be welcoming to concepts that meet with their expectations: providing transparency in their dealings, making a meaningful difference in the communities they serve and the world overall, and cannot be acquired through Amazon. Welcome “back” to an era where local businesses are highly valued and appreciated, a shift that bodes well for new entrants to the franchise arena.
Timing Is Everything
The “Me Too” movement could be a term used to describe the last decade or so in franchising, with many “new” concepts coming into the market that were just not that new, but rather “me too”. Certainly, in the foodservice sector another pizza, hamburger or sandwich concept does not send the market into a frenzy just because it’s prepared slightly different, presented in an interesting manner or provided in a more efficient way. While this follow-the-leader approach has created several successful offshoots categorically, they were simply splitting up the same pie into smaller pieces. Now, the timing appears to be right for concepts in any category to come on the scene and actually start taking market share from entrenched brands by more genuinely reflecting local market conditions and connecting with customers on relevant social interests. The media is not interested in “another” branded franchise opening in the local market, but they are intrigued by a local member of the community reacting to their passion through opening a new business, franchised or not. Especially when it’s combined with a salient purpose relatable to the local community.
Taking On The Giants
Brian Moak grew up in the automotive care business, with his family operating one of the most successful local businesses in the Chicago suburbs, Duxler Complete Auto Care since 1924. As a second-generation operator he sought a way to expand the highly profitable model in a socially responsible way, leading him to franchising. Creating HEART Certified Automotive Care Centers, he is now intent on taking on the giants in an arguably stagnant and diminishing sector, and he may just be able to do it. “Our proven ability to truly take care of our customers gives us 2-3 times more revenue than the big franchise chains (according to their own reporting). We have the opportunity to connect with customers in our local community better and that will drive our success,” says Brian. Their name stands for Helping Everyone Achieve Reliable Transportation with customers taking a back seat to repair quotas and profit targets. The key, according to Moak is employee selection training to ensure there is 100% buy-in to the HEART customer service culture. “We cannot afford to have anyone on our team that doesn’t put the customer first” he says. Not surprisingly, this is his approach to franchisee selection as well, with a deliberate commitment to ensuring every HEART location meets or exceeds the performance results of his own stores, a downfall for larger chains he believes.
Leveling The Playing Field
Franchising as a business model has always been about scale, taking a good concept and creating a great brand through the local owners acting as brand ambassadors. Increasingly, these single franchises have evolved into larger enterprises with multiple franchises, multiple concepts and traditional management systems, with the large getting larger. Generational shifts across the globe are beginning to level the playing field through “social talk” creating brand preference based on a local experience versus traditional advertising approaches. So, for an emerging franchise concept the tide appears to be shifting towards how customers are treated and how they talk about it within their networks, potentially undercutting the scale benefits of national chains that may say interesting things but often aren’t delivering at the local level according to Yelp, Facebook or other relief valves for consumers. For some it appears to be getting to the HEART of the matter.
“Franchising can be done ‘well’ with systems-thinking, a disciplined approach and a commitment to the betterment of society.” – Dr. Ben Litalien, CFE
I teach the Franchise Management Certificate Program at Georgetown University, am the founder of Franchise Well Consulting and have a passion for “social franchising”.