There is a constant source of tension between mature franchisors and their existing franchisees is the periodic need to modify the network’s concept and system to keep up with (or ahead of) the competition; to incorporate new technologies; to respond to changed consumer demographics, ethnicities, preferences and trends; to introduce new products or services and delete from the system older products and services; to modify existing trademarks/service marks, or abandon them altogether in favor of new trademarks/service marks; to modify the exterior and interior design of the network’s units and the equipment utilized thereat; to establish new advertising platforms and campaigns; to require integration of new technologies; to compel franchisees to undergo additional training regarding the foregoing; and, otherwise to keep the mature franchise network’s image, products and/or services fresh, competitive and responsive. We provide franchise management solutions to mature franchises in addition to improving your franchise, franchise dispute resolution, recruiting new franchises and franchise training programs.
If you can remember the a number of McDonald’s franchisees were absolutely flabbergasted, after following many years of tests and seeking franchise expert advice, McDonald’s informed them three decades ago that the McDonald’s system would be including breakfast. The idea of opening their units before dawn, having to add an extra shift, having to learn how to prepare and offer a multiplicity of new menu items and investing the money required to achieve the foregoing (including unit renovations) prompted great fear. In reflection, of course, such concerns seem unworthy, since McDonald’s launch into the breakfast arena proved so popular and profitable to all concerned. But at the time, the concerns were very real.
McDonald’s franchisees were not alone in having to confront significant system and concept changes. Pizza Hut franchisees had to get into delivery when Domino’s success started threatening Pizza Hut’s market share. Several commonly controlled franchise networks – such as Dunkin’ Donuts and Baskin Robbins had to learn how to co-brand each other’s products to increase both chains’ menu offerings and daypart opportunities. And McDonald’s franchisees once again recently confronted a significant system overhaul, the implementation of the new “Mc Cafe” coffee concept.
A mature franchisor requires a certain ability and expertise to effect such a system / conceptual changes, to do so. Franchise agreement language addressing this subject is critical and at Sparkleminds we furnish and suggest language to you. But even when franchise agreement language specifically speaks about reserving the franchisor to the right to initiate system wide changes to the existing system. Franchisee lawsuits complaining of the franchisor’s exercise of said right have been forthcoming, as we analyzed. To minimize the risk of such lawsuits, our mature franchise solutions team will provide advice that is sensitive to the franchisee community’s receptiveness that changes based on your industry’s future forecasts / trends.