THE RTMA
HOW MUCH CONTROL SHOULD YOU HAVE OVER YOUR CHANNELS?
Which restaurant chain has overtaken McDonald's in number of outlets in the USA-yet is still privately owned? The answer is Subway the largest quick-service sandwich chain in the world.
Author: Julian Dent | CEO VIA International
Email: jdent@viaint.com

It exemplifies just what an incredibly clever model franchising really is. At this point, you have probably switched off because you don't think franchising applies to you. Yet it is only when you look at it in detail that you really understand its power.

Subway, for instance, has managed to outsource almost everything. Take purchasing - the franchisees have set up their own cooperative to source and purchase food and paper.

Even business development has been outsourced to Development Agents, who recruit and manage franchisees in a specified market area, in exchange for a share of the royalty. The franchisor is free to concentrate on refreshing the core concept and ensuring that the brand is protected.

The franchisor has great control, which is in the best interest of the franchisees as a whole. The franchisees can expand as fast as they can raise additional capital and delight customers.

What are the lessons for other sectors? Two that come immediately to mind are the way successful franchises understand the value of ensuring everyone wins. They have a completely different quality of focus on the profitability of their franchisees. They don't just pay lip service to it.

Secondly, they refer to themselves as a "system"- they make sure that every component is in synch, and they pay amazing attention to the details. At the same time, the individual franchisees who follow the rules are empowered to be entrepreneurs. Maybe it is time to see if franchising can be made to work as one of your routes to market.


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