| Licensing, Technology Transfers, |
My first column in this series was called 'Shoemaker, Stick to Your Last', in which I suggested that a franchisor is a franchisor is a franchisor is a franchisor. But I couldn't flesh it out as I would have liked to do, owing to space limits. So now I will put a little more meat on those bones.
We no longer have the luxury to think of ourselves in terms by which we self defined only a few years ago. We cannot afford to think of ourselves as printers, hamburger stores, household maintenance people, specialty gift franchises, brake or muffler or transmission shops. If we persist in such thinking, we will not attract investment that now insists upon our being sufficiently mobile to cope with the rate of market changes. Why is that?
What has happened in the last ten years of the democratization of technology, of finance and of information? We have become globalized and digitized. This means that everyone can get into everyone else's business almost at will. Banks are now buying up insurance companies. Computer hardware manufacturers are now in the business problem solving business, much to the surprise of the consultants like the Arthur Andersen's of the world who thought they were the ones doing that. Bookstores couldn't afford to open their doors if they sold books. Now they sell information in all its formats, hard copy and compact disks and on the Internet through simple downloads. There are no more Berlin Walls protecting eastern Europe from democracy, and there are almost no more barriers to anyone's entry into your business, or barring your entry into their business.
The refocusing required to survive in this world, whose configuration ten years from now no one could possibly predict, compels us to acknowledge that our "last" is no longer just shoe repair. It is the operation of business replication systems that include franchising as only one of several business replication methods. And it is the operation of business systems which must be able to accommodate themselves to operate in any unfamiliar business mode which presents itself as potentially profitable. No longer can anyone afford to think of his company as a company founded by me/us, a company that does what I/we have experience in doing, a company that has an establishment patina because it has been doing what it has been doing for many, many years.
Capital, even small investor capital, no longer thinks of any investment vehicle as a five or ten year commitment. Capital will stay with an investment only so long as the investment vehicle self refreshes through diversification at the speed of the market. And, what the global, digitized market is teaching the people who are thinking in these terms, is that contracts cannot drive a business relationship that does not regularly, willingly and frequently self refresh. No single concept of business can be said to have a reliable five or ten year life cycle if it never within that period enables its operators to expand and diversify. Franchise support is no longer telling people how to solve their daily operating problems in a single business context. Franchise support is now, whether we like it or not, showing people how the investment they made in us can hybridize, diversify, combine and expand to keep pace with what none of us could have foreseen ten years ago. The Shoemaker's Last is now multidimensional. The Full Monty has to be refilled constantly to avoid stagnation.
Copyright 1997 - 2008 || Richard A. Solomon
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 | Licensing, Technology Transfers, |