December 10, 2013

How to expand 1000-fold: Franchising?

When I worked with the late Dave Thomas on the grand opening of his Wendy’s store #1000,

he told me that if you can open location #2 and 3 and 4 without being physically present, or have a trusted family member run it, you can open 1000. Getting the fundamentals right in the early stages was the key to success to open the next 999.


Dave, of course, wrote the brilliant Wendy’s Training Manual, his great business breakthrough. It enabled a 16-year-old to learn one job (fry cook) in an hour, and every job in the store inside a week. That manual made possible the rapid growth of the chain, and the essence of it still informs the business model today. (It doesn’t hurt, of course, that they maintain higher standards for the beef they use, compared to other burger chains, but that’s another story for another time*.)

If you dream of growing your business (1000-fold maybe?) there are three grand strategies:

• organic growth

• attracting investors, and

• franchising.

Organic growth is the slow and cautious way. Use profits to expand carefully, and pray a competitor doesn’t steal the idea and outgrow you. Don’t believe for a minute you can “fly under the radar.” That’s a myth – if you have some regional success, it will be noticed, sometimes by predators.

Attracting investors is fraught with danger and difficulty, too. Obviously. But if you can accumulate capital, it improves your opportunity to expand, build a user base, maybe even own a category.You might become the predatory juggernaut outgrowing Mr. Organic Growth of the last paragraph.

If you choose to grow your enterprise via franchising, however, as Dave did, know that here are two do-or-die essentials that your franchisees deeply need: a powerful brand name, and a foolproof set of operations procedures. Those are what franchisees really buy – intellectual property that allows success. Take either one away, and you’ll fail.

The ops manual is up to you. The powerful brand is where we can help you succeed..


*Okay, maybe one story. I had a client that supplied beef patties to all the big burger stores. I asked them who had the highest standards. Wendy’s, they said, were very strict in quality control. No frozen beef, nothing off spec. Well, I asked, who had the worst standards? Burger Chef, they said, without hesitation. Low quality standards, loose inspection, no shipment ever rejected. (The discussion included the words “floor meat.” Don’t ask.) For those unfamiliar with the brand, Burger Chef was at one time #2 to McDonald’s with more than 1000 stores, but died a lingering death. Started in 1954, the last store expired in 1996. Read more here. Any connection between atrocious quality controls and brand death? You decide.