Don't Write a Business Plan
I've started and successfully harvested businesses. I've taught entrepreneurship for almost 20 years. As a part of my teaching and research I've written books and texts on how to write a business plan. I've read almost a thousand of them. Now I believe franchise companies can think differently about business plans.
Much of my passion about planning has to do with the immersion into the detail, texture and context of the market required of the entrepreneur to write a plan. They use that understanding to shape their plan. But, I've always said a plan is obsolete the moment it is printed. By writing the plan a committed entrepreneur will have acquired the depth of knowledge to be nimble and adjust their plan to react to market needs, the competitive realities and new technologies.
In the past few years I've seen entrepreneurs continually thinking about and nimbly adjusting their business model. Business model changes precede and drive plan changes. World class entrepreneur and educator Steven Blank says entrepreneurship is a good idea seeking a business model. I'm particularly impressed with entrepreneurs who use what some people call "design process" to craft and re-craft products, processes and business models.
Design Process is the trans-disciplinary pursuit of opportunity-finding through phases of investigation, ideation, and evaluation to iteratively create solutions. "Business Model Generation", co-created by 470 practitioners from 45 countries, offers a simple framework for business model innovation. This framework consisting of four key components: the offering (what), customers (who), infrastructure (how), and value (why) affords a lens to assess and innovate existing business models or create disruptive new ones.
I've argued for many years that franchise opportunities create a structural advantage compared to corporate hierarchy because of operational synergies inherent in the franchise relationship. Effective franchise companies are efficient sharers of data throughout their system. Hundreds or even thousands of franchisees (entrepreneurs)are working on and solving problems that they share across the system. In essence, the franchise model combines entrepreneurial behavior with a structure to support design process. It is one of the best organizational forms to continuously innovate existing business models.
Entrepreneurship + Design Process + Franchising = transcending the business plan.
Dr. Stephen Spinelli, Jr. is President of Philadelphia University, and has had many years of leadership experience at the highest levels of both academia and business. Previously, Dr. Spinelli was co-founder of Jiffy Lube International and Chairman and CEO of the American Oil Change Corporation.
Dr. Spinelli’s work has appeared in the Journal of Business Venturing, the British Management Journal and Frontiers of Entrepreneurship. He has also been featured in such popular press as the Wall Street Journal, Financial Times, The Boston Globe, and Entrepreneur.
Why Doesn't Chipotle Franchise?
I’m a huge Chipotle fan and I’m not ashamed to admit it. I love a big fat carnitas burrito with every possible topping (is that even the right word for what you put on a burrito?) on it, especially guac. But every time I’m outside of New York I wonder why there aren’t more Chipotles out there. Sure there are a bunch (at the end of 2014 there were more than 1,700) but their numbers pale in comparison to other “fast food” giants like McDonald’s or Subway (they have more than 36,000 and 43,500 restaurants respectively). So why hasn’t Chipotle followed suit and gone the obviously successful franchising route?
Franchise Buyers Don’t Need a Lawyer – Yeah Right!
These excuses are usually first heard when I meet with a franchise owner who is now asking for advice regarding their dissatisfaction with their franchise relationship. Too late. That is, sometimes it is too late to help them.
Follow the System
While these franchisees might think they are helping the brand, in fact it’s just the opposite.