How Franchisees Can Find Room for Innovation Franchisees have to play within their franchiser's rules, but that doesn't mean they have to turn off their creativity.

By Randy Myers

This story originally appeared on Business on Main


When Kim Stevens was ready to go into business for herself and open a day spa, she decided to buy a franchise. After 25 years as a senior executive in the copier industry, she knew she would need some help breaking into a new field. She found it in Woodhouse Day Spas, opening her first franchised location in Austin, Texas, in 2005. She hewed tightly to her franchisor's playbook, found success quickly, and soon opened a second Woodhouse franchise, and then a third.

Then the innovation bug kicked in. Or, to be more precise, it found her.

Stevens' success, it turned out, had not gone unnoticed. Some hotels in San Antonio that were struggling with their in-house spas came to her looking for help in reviving them. Intrigued by the challenge, and convinced that she could translate the Woodhouse experience to a hotel setting, she opened the first two hotel-model Woodhouse spas in 2011.

Inspired by that experience, she and Jeni Garrett, the founder and CEO of the Woodhouse Day Spas franchise system, teamed up later that year to create an entirely new company, Woodhouse Hospitality Group. The spa management and consulting firm helps hotel operators renew distressed spas by revamping their services, retraining their staff and implementing proven marketing strategies. Today, Stevens splits her time between the new venture and her own spas.

Approaching a franchisor with new ideas

"Innovative franchisee" is not technically an oxymoron; there are more of them around than, say, skinny sumo wrestlers. Still, they're not the norm.

Franchising by its nature discourages innovation on the part of franchisees, who are required by their franchisors to follow very specific policies and procedures spelling out exactly what they will sell, how they will make or deliver it, and even what their stores or restaurants will look like. That consistency creates a comfortable, trusted experience for consumers. It also enhances the odds that franchisees will succeed, allowing them to leverage a tested and proven business model.

Still, even the most rigorously disciplined franchisors remain hungry for new ideas. If you're a franchisee longing to put your own imprint on your business, or a potential franchisee wondering if you'll be able to do so, you do have that opportunity. Here are a few ways to improve your odds of success:

- Master the basics first. Make sure you've learned to execute your franchisor's existing business model before suggesting ways to improve it. A successful franchisee will have more credibility with franchisors than a struggling one.

- Review your franchise agreement. It will tell you where you can and can't try out new ideas.

- Contact your franchisor. Even if you're fairly sure your idea won't violate your franchise agreement, it's a good idea to run it past your franchisor anyway. As consultant Jim Deitz, president of The Franchise Doctor Inc. in Atlanta, Georgia, points out, your franchisor may have tried your idea in the past and could save you from heading down a dead-end street.

- Do your homework. Research your proposal, Stevens suggests. Especially if you're suggesting something that would impact all franchisees, create a business plan before approaching your franchisor.

If your idea is really good, you may be able to get your franchisor to embrace a new product or service you've developed. Even at McDonald's, many of the best-selling menu items were created by franchisees. But the odds will be long, as will the wait as the franchisor evaluates your concept.

Innovating with clever marketing

Want to move faster? Many franchisees find it easier to exercise their creativity in the marketing arena. In Tampa, Florida, for example, Guy Campbell, owner of eight Moe's Southwest Grill franchises, created a "Moe Monday" promotion — $5 for a burrito, drink and chips. That deal has made Mondays, notoriously slow in the restaurant trade, one of his biggest sales days of the week.

In Oklahoma, Brandon Boozer, owner of five Batteries Plus franchises, found a cheaper way to promote his business on the airwaves. Rather than buying 60-second radio spots at $100 a pop, he filled small boxes with merchandise worth $20 retail and gave them away to radio stations for use as prizes during call-in promotions. With the call-in format, he recalls, he was assured there would be at least 60 seconds during each giveaway in which the hosts were mentioning the Batteries Plus name.

If you're looking to open a franchise but haven't yet chosen one, you'll want to ask prospective franchisors how amenable they are to new ideas. Some are more flexible than others.

Woodhouse Day Spas, for example, prides itself on nurturing the creativity of its franchisees. So when Tina Lovelace, a franchisee in Denver, decided to apply for a tavern license that would allow her to sell alcoholic beverages at its spas, Woodhouse didn't object. Similarly, Caring Transitions, a franchisor of senior moving, downsizing and estate sale services, did not object when Kendra Good, its franchisee in Casper, Wyoming, expanded her business to accommodate employee relocation services.

Becoming a successful franchisee will always require being able to execute the business model created by the franchisor. But as these examples show, innovative franchisees can still bring something special to their small businesses.

Wavy Line

A former reporter for The Wall Street Journal and Dow Jones and contributor to Barron's, Randy Myers is a contributing editor for CFO and Corporate Board Member magazines.

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