Why is Franchising Such a Huge Success?

After opening and operating six donut and coffee shops, I wanted to expand my business, so I looked around to see who the food services business was most successful. At the tie, it was my Quincy, MA neighbor, Howard Johnson. Why? What was he doing differently? He was franchising his Howard Johnson outlets. Hmmmm.

Who was bigger and more successful in businesses other than food services? Energy companies (Esso, Texaco, Chevron, Amaco) and auto companies (General Motors, Ford, Chrysler). What were they doing differently? Franchising. Hmmmm.

Who is even more successful at franchising that these companies? The United States of America, including the states and municipalities we live in.

Why is the USA more successful than Russia and China? Those countries are larger and more populated…. I think it’s a matter of franchise vs. company-owned and operated.

What are the similarities between my governments and the franchise system? They all provide me with services for which they charge a fee. The Federal government provides departments of defense, justice, commerce, education, transportation, etc. The states provide states courts, police, education, labor, etc. The municipalities provide similar services plus trash pickup, snow plowing, utility maintenance, etc. The fees my government charges for all these services are called taxes (franchise fees) and they are paid by all U.S. citizens (franchisees).

Just imagine if the original 13 American colonies never amalgamated and ford a union. What would they be today? Compare that scenario with where, who and what they are now. If you don’t believe in unity there is strength, consider the fragile snowflake that flutters slowly to earth and disintegrates. However, if enough of them stick together, they can paralyze an entire city. Everything started small. Ford had a bicycle shop; General Motors started each division with a single automobile. McDonald’s, Burger King, Subway and Dunkin’ Donuts all started with one store. Marriott, Hilton, Sheraton and Holiday Inns started with one lodge. Putting the 13 colonies together and utilizing their combined clout allowed them to grow into 50 successful states, just as duplicating our first six successful donut shops by allowing individual entrepreneurs to join our system grew us to where we are today. I don’t believe our elected representatives realize that we in franchising copied their system to bring us the same success they have achieved.

Question: Are all the franchises (U. S. citizens) happy? Of course not! Are their fees (taxes) too high? Of course! Is the government doing enough for them? No! However, do they (the citizens) have the best-proven system in existence? Yes! Would the majority prefer a different system? No way!

As franchisors, we need to ask, are all our franchisees happy? Of course not. But are the vast majority successful and happy they belong? Yes!

I believe our priority in the franchise community is to do everything in our power to educate legislators by emphasizing our similarities. For them to try to restrict our proven method, which after all is an exact copy of the systems they represent, would be like telling themselves there is a better way. When they find it and practice it, we will again follow them!

William Rosenberg, who died in September 2002, was the founder of Dunkin’ Donuts and the International Franchise Association. More significantly, perhaps, he was one of the world’s greatest proponents of franchising. Bill believed that franchising provided a system that allowed people from every nationality, regardless of money or education, to fulfill their dreams. He used every opportunity to promote franchising for the good of every: franchisors, franchisees, and customers. Anyone who pays taxes to a government will appreciate Bill’s point of view in the Opinion piece. That’s not to say that everyone will agree with him, but that’s why we call it his opinion. And Bill’s opinions will be missed by friends and associates worldwide.