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A Hamburger by Any Other Name...

How important is product in your search for the perfect franchise?
September 3, 2002
URL: http://www.entrepreneur.com/article/55018

As you narrow your franchise search, you have many factors to consider before choosing that one concept you're going to dedicate the next 10 or so years of your life to. Is the product you sell one of those considerations? Should it be? And if you already know what category you're interested in, how do you choose between similar products? Is a hamburger always a hamburger?

Franchise Zone spoke with Stephen Spinelli, co-founder of Jiffy Lube and director of the Arthur M. Blank Center for Entrepreneurship at Babson College in Wellesley, Massachusetts, about the role products should play in choosing a franchise.

Franchise Zone: What should people look at specifically when they start looking into franchising?

Stephen Spinelli: Start with what's hot. Prospective franchisees have two different perspectives: The first one is the brand-name issue. A lot of people would like to own a McDonald's. There might be some allure to Midas Muffler or Jiffy Lube or Dunkin' Donuts, because those are well-established brand names, and they carry some visceral belief that they're successful--if they've been around all this time, they must make money, and there's some logic to that. The second perspective is the what's hot, new-on-the-block kinds of things: an Internet or computer service or a new food, a new and different name that seems to be growing pretty fast. People are excited to get on that wave, and that sort of kicks off the search. Or they may start with this dual perspective, and then narrow their focus.

During this initial investigation, should they be thinking about the products these different brands are selling?

Clearly, they should. But I probably have the minority opinion on this: I believe [a prospective franchisee] should consider how a customer can use the product and the sustainability of that product versus personal passion for the product. Many people, including a number of entrepreneurship professors, will say you've got to love the product you're working with and selling. I don't think there's anything wrong with that, although the word passion means different things to different people.

A more valuable perspective is saying, "I believe this product or service can truly help my customers, and I'm excited about that." That is much more sustaining, personally and professionally, than saying, "I love sports, so I'm going to buy a Play It Again Sports franchise." Becoming too ephemeral may detach you from the viability of the concept, but if you investigate the product and find a lot of people need this or it can make their lives better, then the passion has much more depth. That's where I would encourage people to focus their search as it pertains to the product or service.

You gave the example of someone liking sports and buying a Play It Again Sports franchise. If people do have that kind of passion for one particular thing, could they be in danger of focusing too much on one segment?

Yes, and that can get in the way at times. I love food, so do I want to own a restaurant? There's a world of difference between going to a fine restaurant and enjoying dinner with your spouse versus owning and operating that restaurant. Some people can make that connection between their personal interests and delivering that interest for other people, but I don't see that it's a necessary component [for success], and at times it can get in the way.

When a person has narrowed down his or search to a specific type of franchise--say, a hamburger restaurant--how does the product factor into the choice between a McDonald's and a Wendy's?

This issue arose early on with Wendy's. The "where's the beef?" commercial was a direct reflection of the Wendy's franchisees' belief that their hamburger was simply better--it was bigger, juicier and fresher. Whether it was or not, they believed it, and that belief really pushed them forward to being able to enter the market. When Wendy's entered the market, everyone said, "How can you open another hamburger franchise? Are you crazy?" but they really believed in the product and that the customer was under-served by the other competitors in the marketplace.

This dramatic belief was specifically attached to satisfying the need of the customer. It wasn't necessarily, "I love hamburgers, and this hamburger is a little better, so I'll choose this one." It was, "People love hamburgers, and our hamburgers will satisfy more people." You take that understanding of the product and project it on to customers.

So the customers should be a major consideration in any franchise you choose?

It should be absolutely at the core, and the product should only be a reflection of the need of the customer.

Should a franchisee's opinions on the product come into play when trying to determine other people's needs?

You may not be an accurate reflection of the needs of the broader audience. If you think the square hamburger is a crazy idea, does that mean you shouldn't buy a Wendy's franchise? You have to be careful about that.

Is it possible for franchisees to be successful with a product they either don't like or don't use?

It's a really interesting question. Could you be a franchisee of McDonald's if you were a vegetarian? My general belief is that there's probably a spectrum. If I believe eating meat is evil, it would be a pretty dramatic mistake to open a McDonald's franchise. If I think McDonald's hamburgers are absolutely perfect and no one should ever eat anything else, I'll probably be blinded in a different way and not as successful as I could be. If you're on either extreme of the spectrum, you should exclude yourself from that product or service.

More toward the middle, I'm less concerned. I like to have a hamburger every now and then, but I don't eat it every day. I'm not a great car buff, but I believe changing your oil extends the life of your car and disposing of the used oil in a proper way makes for a sound environment. It's a very complicated set of variables that makes up my perspective on the product--you probably need to think through the depth of your own perspectives.