Multiply good things, you have leverage. Multiply mistakes, you’ve got a mess.
I like what’s going on over at Special Ops. Just check out the recent article on the Muliplier Effect in Franchising. The article makes a powerful point about the nature of franchising and what may be the most common franchise malady: sloppy replication.
We’re working together to tansform Special Ops’ services from a narrow focus on franchise manuals, to providing franchise clients with the real operational insights they need to create effective replication.
That’s why Special Ops is in business. It’s not to publish manuals, though they do create some of the best in the business. Their real purpose is to make franchise operations as profitable as planned.
Good manuals, of course, are a foundational piece of that effort, but the challenge is much bigger than just documented systems. The challenge for many franchisors is in understanding just how exacting they need to be to ensure maximum profitability.
From business concept to process design to documentation, to training and support, each stage plays an important role in franchise profitability, but most or all of these stages fail to get the attention they deserve. Franchisors, perhaps, believe that focusing on sales and marketing are better investments. But supposing that a marketing or sales initiative does bring in more top line dollars, solid operations ensure that the bottom line remains healthy. And the bottom line is what gets us all paid.
If your work as a franchisor doesn’t result in accurately replicating your proof of concept throughout the network, what exactly are you doing? Franchising is all about leverage, but poor replication destroys leverage. It creates big black holes into which money and effort sink, making franchising a disappointing, if not hellish experience. The devil is in the details, as they say.
The real insight here is not that operations should follow systems. It’s that every small deviation adds up to major consequences for the network. The good news is that most problems are located in plain sight and can be handled with relatively simple fixes, not requiring paradigm shifting strategy– although that might be what’s fun and interesting to work on (and where too much effort often goes).
The bad news is that the problems are in plain sight, and franchisors don’t tend to see them! Forget about how many problems there are, or what to do about them. You must first acknowledge that any given deviation from the system can have real effects on profitability, much larger than the apparent effects of that one issue.
What we’re advocating is for franchisors to commit to exact replication of every possible choice, or to clone their proof of concept. Quoting the article:
The point of cloning is not consistency for it’s own sake, nor is it to undermine franchise sales objectives. Cloning is what the most effective franchises actually do. It’s what creates real leverage, multiplying every positive outcome at a rate much higher than any deviation that can drain the system. Far too many franchisors don’t believe they can afford to clone their processes. The truth is, they can’t afford not to.
Seriously. Read the article. Then take a good hard look at your franchise operations. Creating a fail-safe business is what you’re really after. Too often, that efforts turns into a house of cards.
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