Is the sun setting on your franchise business model?

This week I had the pleasure of speaking with several significant influencers in the Franchise space, and the topic of conversation turned to the "owner / operator" vs "investor / manager" franchise ownership model.

Traditionally, many franchisors have been reluctant to allow investors to purchase a franchise and run it with a manager / management team in place. The theory behind this is that without some operational "skin in the game", the franchise would not be as successful, as no one works a business like a hands on owner operator.

Owners were also in some cases prohibited from running other businesses, be they either a complementary business (due to conflict of effort) or a competitive business, due to a perceived "conflict of interest".

The alternate argument is that an investor or multi business owner could have the resources and skills to assist the manager to take the business to a level well beyond that of a single operator. This is supported in part by the success of many multi site franchisees in various industries.

On an international stage at least, this seems to be turning, with the competition for attractive franchisees encouraging progressive franchisors to be much more accommodating when it comes to exclusivity and operational engagement.

My point of view is that this is a good thing. Times change, running a business today is far different than 50, 20, or even 5 years ago. Successful business owners, franchised or not, need to be aware of changing market conditions. Local is now "anywhere on earth" in many industries, with delivery methods and marketing now pushing micro business to global competitor. Product lifecycles are shorter than ever. Bootstrapping entrepreneurs are disrupting markets everywhere. Remaining nimble is an essential part of a successful strategy.

So if you are having problems attracting new franchisees to your offering, maybe its time to try something different. Review your model, and ensure that "what you did" is not the reason for "what you do".