From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Company (Paperback)

As an editor for Blue MauMau, the web's #1 news site covering franchised and small businesses, I interview quite a few CEOs and leaders about franchise issues that they struggle with. I also am in the position where I read quite a few books on franchising. Most are self-help books, providing glossaries of franchise terms and advice for those needing a lesson or two from a Franchise 101 class. E.g. what is a franchise chain? what should be in a franchise disclosure document? Then there are books in which consultants instruct would-be franchisors based on their own experience. That is to say, follow these five steps to organize your franchise salespeople for selling success, take my course to see whether or not franchising is right for you, or how a more driven CEO will make your franchise chain a success. What's missing from most of these books is the development of a strategy for franchising a business based on what economic research shows are the drivers of franchise success. Scott Shane, professor of entrepreneurial studies at Case Western Reserve University, venture capitalist, consultant to franchise chains, and author of various books on small business and franchising, is the author of From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Business. In its pages one finds the building blocks of an actual business model, explanations of franchising for strategists, and identifications of drivers of a business. Of the two choices, franchising a chain of ice cream shops or brokerages that sell through the Internet, which new franchising chain would you choose that best fits the franchise model and the chances for success? Shane answers in the book why the economics clearly say ice cream shops. Franchising has its own set of problems that must be understood, managed and controlled. A new franchisor better understand franchisee free riding, loss of intellectual property, holdups (termination threats) and underinvestment. And no matter how much of a saint that the franchising firm's founder thinks of himself, there are built-in conflicts between a franchisee's self-interest and the franchisor's, such as obsolescing bargaining and collective control. Some self-made entrepreneurs may be averse to such reading. After all, those words are a mouth full. The concepts strange. They may think that there's nothing that a great sales team and the right kind of franchise buyer won't solve. But these inherent conflicts call out for the need of proper mechanisms, structure and management. If the franchise system is poorly conceived, no salesperson and no super selection of franchisees will save the franchisor. Consider the franchise fee and royalty rate: many franchisors consider the process of setting these to be as simple as, "Hey, $50,000 sounds nice and even, as does a 10 percent royalty fee. Everyone else does it." Their franchising consultant may have cut their franchise model out in cookie-cutter fashion. Unfort

If you are considering franchising your own business concept, this is the best, most definitive guide I have seen on the subject. As a former franchisee and author of a book on franchises, I've experienced and read a lot on the subject. This book is well-researched, easy to read and a very thorough guide. A must read before you start selling franchises, and an interesting, helpful and very informative read if you are considering buying one to operate as a franchisee.

Whenever I go to any strip mall or general retail area I start to wonder if there are non-franchise establishments left. Almost everything is franchised and if there is not one near you just wait because is coming soon. This book details out some of the facts about the franchising boom. It states that almost 2,300 companies franchise and that there are about 770,000 outlets that generate about $1 trillion in sales annually. Yes the world has gone franchise and the best thing to do is hop on the band wagon. This book talks about why some firms in some industries chose to go the franchising route and when others do not. One of the main goals of the book is to explain when franchising is a good strategy for a firm and when it is not. There are advantages and disadvantages to this strategy and the authors try to walk you through them. The authors also try to help the reader determine whether you are better off using franchising in your own business. Overall I found the book to be interesting and full of great information. The authors seem to know their stuff and if you are involved in franchising in any capacity then this book should help you if for nothing more then to gain a better understanding of the big picture and understand the drivers for the business model.