Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
Think being a franchise owner is like living in a universe where creativity is punished by an omni-present being watching your every move? You're wrong. Every day, there's a franchise owner who's bucking to become the next Picasso. But there's one central theme in being creative with a franchise: You don't reinvent the wheel. You try to make it better.
Take Greg Hund, who opened his New York City-based Mail Boxes Etc. six years ago, and with more than $1 million annually in sales, has turned it into one of the five top-selling stores in the chain. Hund, 37, invented the Virtual Doorman.
For a $10-per-box delivery fee, Hund's store--and now other New York Mail Boxes Etc. locations--accepts anything from dry cleaning to flower arrangements to parcel packages. The service allows residents of apartment buildings without doormen to receive deliveries safely.
"I came up with the idea during the Mail Boxes Etc. training program," says Hund. "I ran it by my area developer, and he was enthusiastic. If a project makes sense, they aren't going to have a problem with it. But I don't think they'd want me selling soup and salad from the back room."
"There's innovation that explores new territory, and then there's innovation that rocks the system," says T. Scott Gross, former franchise owner of a Church's Chicken and author of Positively Outrageous Service (Warner Books). "One is good, and one is not good. No matter how you do it, the last thing a franchisor wants is a surprise."
Well, that's a matter for debate. Bill Rosenberg, founder of the International Franchise Association and Dunkin' Donuts, insists that if a franchise owner wants to experiment, "try it and see what happens. If it works, we'll try it in the system."
But Russ Cooper, senior vice president and general manager of franchising at GNC, would prefer to know what the company's franchisees are doing beforehand. If nothing else, he believes it strengthens the relationship when franchisees are upfront about what they want to experiment with. For example, franchisee Michael Taylor brought the idea of a smoothie bar to GNC and, Cooper says, "It's been an outstanding partnership."
As long as an idea fits with a system's vision, innovation can work even at giant franchises. Three different franchisees came up with the Big Mac, Egg McMuffin and Filet-O-Fish. And not all McDonald's establishments look alike. In Orlando, Florida, franchise owner Gary Oerther owns what is billed as "The World's Largest Entertainment McDonald's," which caters to families by boasting a 15,000-square-foot playground, a video game arcade and a pizzeria.
Always About the Customer
Taylor, 40, says he came up with his idea because he looks at his store from the customer's perspective and asks, "How can I make this store special?"
Cooper, who has rejected other franchisee ideas such as selling athletic shoes, says Taylor's idea was appealing because "the smoothie industry is a $1.2 billion industry, but there's no real leader."
He expects 500 to 1,000 stores will eventually have smoothie bars, and GNC is now aiming to open stand-alone smoothie bars, selling blended drinks and 100 of the company's top-selling supplements. "I tell Michael that our company can never repay him," Cooper says, "to which he responds, 'Oh, yes, you can.' "
In a way, GNC has. Besides owning three stores in Tuscaloosa and Northport, Alabama, which collectively earn $1.4 million a year, Taylor acts as a consultant, helping GNC make its bid at ruling the smoothie market.
Develop Your Own Formula
Navin Bhatia, 49, owns nine Valvoline Instant Oil Changes in San Antonio, Texas, employs 90 people and brings in $6 million annually. He has had not just one innovative masterstroke that Valvoline has incorporated into other stores, but two. First was Bhatia's "good, better, best" marketing strategy, which differentiates each type of motor oil and includes recommendations specific to the needs of each customer's car. His second idea evolved into the Maximum Vehicle Performance (MVP) program, which allows Valvoline employees to schedule services based on the model of the car and the driver's traveling habits.
Go Ahead, Get Creative!
The question remains: How can you be as innovative as Bhatia?
* Determine whether your store follows your basic philosophy. The MVP program came about because Bhatia wasn't comfortable with employees giving general advice to customers. They started referring to an industry publication, giving specific recommendations for customers' cars. "We were doing what was good for their vehicles, not necessarily what was good for our bottom line," he says. Impressed with Bhatia's system, Valvoline headquarters developed a computerized database to make specific auto-servicing recommendations.
* Look for problems before they become problems. Bhatia bought a formula for running a business, but when meeting with managers, he asks, "How can we enhance the system?"
* Don't forget that you once had a life outside of franchising. Bhatia's "good, better, best" marketing strategy was inspired by his former job with American Express. Just as American Express users upgrade to Gold, Platinum and Centurion cards, Valvoline customers get grades of oil based on their cars' needs.
It's Your Store
"There is a general misconception that franchisees are just managers, but our success is 100 percent based on our ideas," explains Chris Taylor, who co-owns an Arlington, Texas, Fastsigns location with his wife, Jean-Ann. The Taylors developed a marketing magazine targeting apartment complexes; the franchisor later adopted the Taylors' fresh idea for all its franchisees to use.
"Creativity," says Jean-Ann, "is what separates our store from other stores in the system. In that sense, we're not all the same."
Contact Cincinnati writer Geoff Williams at firstname.lastname@example.org.