Enterprise Franchising: Giving Franchisees More Flexibility

The face of America's franchise owners is changing. In the traditional franchise model, the franchisee purchases a brand and follows an operator's manual. They stick to the proven methods of success - regardless of their local market or individual background.

While this model works for many, an increasing number of entrepreneurs are seeking a more individualized approach. Today's franchisees not only want to run a business with the backing of an established franchisor, they also value the prospect of investment and expansion, the ability to capitalize on a brand with their own business savvy. Instead of entering the franchising business with the intention of owning a small shop, today's franchisees are interested in managing a growing and expanding business.

Franchisors should embrace the entrepreneurial franchisee and attract these individuals by adapting their business models to be more flexible and customizable. For example, a franchisor can work with franchisees to identify target markets, develop a localized marketing strategy, and choose the unique combination of franchisor offerings or tools that make sense for each. This approach can be viewed as "enterprise franchising," a marriage of small-business ownership and the traditional franchise model.

How it works

When franchisees conduct business with a specific client base in mind, they can customize the client experience. This approach to franchising allows franchisor and franchisee to collaborate in identifying ways to provide the best services possible to the unique client base.

For example, in the realm of home care, a franchisee may establish a partnership with an area hospital, which can drive referrals and franchisee growth. A franchisor can then provide tactics and offerings that help franchisees identify, pursue, and strengthen a relationship such as this. Another franchisee might have a very different focus, such as serving clients with dementia. In this case, once the franchisor and franchisee have identified the market opportunities, they can work together to assess the available marketing tools and decide which are best suited to this unique audience.

By collaborating to develop a business and marketing strategy, choosing from the "a la carte" menu of tools the franchisor has developed, franchisees can carve out and directly target a niche demographic more efficiently and effectively.

Benefits for franchisees

Enterprise franchising is not necessarily for everyone. This model is best suited for driven, business-oriented franchisees who are truly motivated to run a business, not simply take part in it. This approach inherently creates a more driven and successful network of franchisees.

Franchisees are often coming to the franchise business with past professional or personal experience that both colors their perspective and provides a unique skill set for running a business. Playing to these strengths will help the franchisor work with each franchisee to develop the best possible strategy for growth.

Developing targeted marketing and sales strategies gives the franchisee an element of control in their business they may not have found in a traditional franchise model. Involving the franchisee in this process fosters a sense of investment and ownership in the brand that will, in turn, create a stronger, more engaged network.

Chances are, franchisees will begin to see greater individual successes from the backing of both their franchisor and franchisee network. When enterprising franchisees attain individual success, the franchise as a whole and the brand itself become positioned for long-term growth.

Benefits for franchisors

Just as enterprise franchising is not right for every franchisee, when assessing the value of enterprise franchising for their own business, franchisors should consider several factors, such as size, industry, and market, This model has proven to generate the most value for those franchises that are well-established. It also works best when the franchisor has confidence in the system.

Implementing this approach demands significant involvement on the part of the franchisor, which must be willing to dedicate time and resources to developing a robust toolbox or customizable package of support offerings for the franchisees. These quality marketing and promotional tools, informed by research and franchisee feedback, are not only essential to franchisee success, they also create a network that is confident in the franchisor's backing and will more readily communicate individual needs or successes.

Consequently, the engagement and feedback mechanism inherent in enterprise franchising means that, for the model to work, the franchisor must be invested in maintaining an open dialogue and developing close working relationships with franchisees. This is vital to providing ongoing guidance and ensuring that each franchisee's business is positioned for long-term success.

Enterprise franchising is a practice in give and take, with certain corporate values that must stay intact and other elements of the business model that should be more flexible. To many, this tension may sound counterintuitive and may raise concerns of diluting the brand. However, if enterprise franchising is employed by a business that is well suited for the model, it can strengthen and concentrate the brand within various target markets, expanding the reach of the network while maintaining core values.

As we move into 2014, this new kind of franchisee will be demanding greater autonomy within the franchise system. The enterprise franchising model can be an answer for franchisors seeking to give franchisees increased control over their businesses, while also providing a more tailored marketing plan to clients. When used well, this system can become key to the success of a rapidly growing and changing franchise system.

Jennifer Tucker is vice president of business development at Homewatch CareGivers International, an innovative home care franchisor. The company pioneered the Enterprise Franchising model, which allows flexibility and independence among its franchisees when it comes to selling and marketing their services. Contact her at 800-472-2290 or franchise@homewatch-intl.com.