An American Icon


Walk into one fast-food franchise, and then visit one of its other locations. Pretty similar, isn't it? There may be slight variations, but the overall concept remains the same. Though consumers may not be conscious of it, this type of consistency is what they want. "It's a comfort," says Knauf.

Thanks to branding, franchising also "conveys a sense of the familiar," says Michael Solomon, a human sciences professor of consumer behavior at Auburn University in Auburn, Alabama, and director of Mind/Share Inc., an Atlanta consulting firm.

Consistency gives consumers confidence in a business, says Robicheaux, and franchisors realize that imposing and maintaining a certain standard for all franchise outlets-encompassing appearance, quality and service-is what protects and reinforces their brand despite variances in location, culture and franchise operators. Some franchisors even tout this aspect in their marketing. Robicheaux points to one of Holiday Inn's past advertising efforts with its "The Best Surprise Is No Surprise" campaign.

Solomon believes this element of predictability makes sense for consumers. "It lowers their search cost-the amount of effort that goes into evaluating alternatives," he says. "To some extent, we're variety-seekers; but, especially if we're outside our home territory, we [sometimes] want the assurance of a McDonald's. You know exactly what you're getting."

The concept of uniformity within a chain has become such standard practice that it's sometimes hard to differentiate which businesses are franchises and which aren't. "[Independent] businesses realized [franchises'] value in cultivating and owning their brands," says Robicheaux. Some of today's most successful nonfranchise businesses espouse that very ideal. Barnes & Noble, Gap and Starbucks have each made a definite imprint and boast loyal followings.

For instance, Solomon observes, "Starbucks understands the importance of systematizing, where the quality and delivery are predictable. They also understand the importance of the design elements that go into their retail locations." Speculating that Starbucks perhaps learned from the success of some franchise operations, Solomon believes the company saw "that [it could] create a certain design philosophy and roll it out in a uniform manner and get similar results." Citing Barnes & Noble as taking the same cues when it comes to providing ambience, he adds, "they understand that they're providing an experience, not just a product. They've taken that basic insight and mass-merchandised that."

But having the same look isn't the only lesson that franchising has taught other businesses. "One of the things franchises are particularly good at is transferring something discovered at one establishment to another," says Linda Argote, a professor of organizational behavior at Carnegie Mellon University in Pittsburgh. She cites an article in a June 1998 issue of The Economist describing how Ford sent a task force to McDonald's to learn how they deliver and transfer knowledge on such a global scale. "We're seeing this mode of organizing being infused in other organizations," Argote says.

And the proliferation of franchises across the world has shown other businesses that the sky's the limit when it comes to expansion. "To see franchises that have 10,000 or 15,000 units is certainly an inspiration," says DeBolt. "I think [other businesses] saw an opportunity for growth."


Robert Robicheaux, chair of the Department of Management, Marketing and Industrial Distribution at the University of Alabama, Birmingham, says, "McDonald's has shown a unique capacity to adapt and meet customers' expectations all over the world." And when it comes to what Robicheaux considers a cultural icon-Happy Meals-he adds, "McDonald's changed the way Americans fed their children."

The McDonald's sphere of influence has even affected other franchises. "Dave Thomas, founder of Wendy's, said he didn't invest a lot of money in market analysis and research when he first started the business. He just followed McDonald's," says Robicheaux.

Though International Franchise Association president Don DeBolt has a tougher time naming the "best" franchise, he admits that, "by pervasiveness and impact, it's McDonald's. They made franchising a household [word], and they grew faster and stronger."

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This article was originally published in the January 2005 print edition of Entrepreneur with the headline: An American Icon.

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