Dynamis’ Nicky Tatley takes a look at how franchising has moved away from its traditional fast food-orientated roots to encompass offerings from all walks of life today.
When you think of a franchise, a McDonalds or a Subway is likely to spring to mind, so you’d be forgiven for thinking that the industry is dominated by fast food outlets.
There was a time when this was true. The earliest franchisors in the UK were J. Lyons & Co, which franchised the hamburger chain, Wimpy in 1955, and ServiceMaster, which began franchising in 1959, and remains a huge international franchise business to this day.
The US, of course, trail-blazed in the proliferation of fast food outlets. The first McDonald’s restaurant was actually a barbecue joint opened in 1940, along California’s famous Route 66, by brothers, Dick and Maurice MacDonald. The brothers streamlined their business practices and menu (including, of course, their best-selling burgers) and the restaurant was first franchised in the early ’50s.
Fast food franchising boomed and by the end of the 1960s some of the most renowned fast food brands (McDonalds, KFC and Burger King) had become international franchises.
With a burger shop on every corner and the emergence of drive-thrus, fast food – with its quick and efficient ‘service with a smile’ – steadily wove itself into the fabric of American culture and folklore.
The country’s (and indeed the world’s) love of Big Macs, finger-lickin’ chicken, pizza, ribs, subs, fries and shakes ‘to go’ hasn’t waned despite raised public awareness of health and nutrition or sensationalist movies such as Morgan Spurlock’s “Super Size Me”.
In fact, recent years have seen several US celebrities investing in fast food franchises as a secure investment for their excess millions. Former NBA star, Magic Johnson made the headlines by buying a string of Burger Kings, current R&B superstar, Pharell Williams recently bought several Fatburger franchises in China (all the rooms have roofs as far as we are aware), NFL poster-boy, Peyton Manning owns 21 Papa John’s pizza franchises in Denver, and Californian musician, Rick Ross even raps about his Wingstop fried chicken franchises!
However, despite the continued success of fast food in the industry, the franchise model is now represented in nearly all recognised business sectors.
Data released by the US Census Bureau in 2010 – the first report drawn up by the Bureau that gathered information on franchises – says that franchises made up 10.5% of business across 295 industries. And in the UK, fast food businesses account for only 5% of opportunities on leading franchise opportunities website, FranchiseSales.com.
Of the 930 franchise systems in operation in the UK today, the fast food industry has a healthy representation, but it now jostles for attention alongside opportunities in the financial, consulting, training, care, cleaning, children’s entertainment, dating, pet care, event planning, education, fitness, gardening and building maintenance sectors – and the list goes on.
In the Entrepreneur 2014 Franchise 500 – the annual ranking of the top franchise opportunities in the US – the top ten included a 24-hour fitness club franchise, a hotel chain, a hairdressing franchise called Supercuts that offers 20-minute haircuts (no appointments needed), and Servpro – a disaster restoration business for corporate and residential properties.
So it is clear that, in the past 20 years, franchising has taken off globally and across all manner of business, with social franchising being its latest incarnation.
Taking the basic concepts of commercial franchising to achieve socially beneficial results, this model is becoming a real alternative to standard charitable organisations, providing services such as healthcare and education to the disadvantaged, as well as jobs and prospects for many people in the poorest countries.
That’s a far cry from the old franchising empire – where Ronald McDonald and Colonel Sanders reigned supreme.