Build Your Startup with a Franchise Mindset to Scale for Success
By A.J. MacQuarrie
Recent films like “The Founder” and books such as “Ray and Joan” have spotlighted Ray Kroc, one of the great business leaders of his time. Among the many lessons that Kroc’s experience holds for this era’s entrepreneurs is the business model he created for McDonald’s. This model drastically changed the landscape of how companies can expand at a rate that would otherwise be too costly for most.
Franchising turned McDonald’s San Bernardino hamburger and shake stand into a global giant worth billions of dollars with 36,899 restaurants worldwide. But even if you never take on the legal requirements to become a franchise-based business like McDonald’s, that mindset and approach can help your young company prepare for long-term success and growth.
The concept is very simple: you create a business that can be replicated over and over again by people who profit handsomely from a turnkey solution. This allows you to be in multiple locations at once without ever having to run them yourself.
Building that infrastructure upfront means you’re thinking about the future of your business. You’re preparing for the possibility of success, and not incidentally, helping make success and growth more likely long before it happens.
When I was building my own company of healthy vending machines, I shifted my mindset to create a way that I could get my product into the hands of independent operators nationwide. While we are not an actual franchise, I’ve used many of the same principles as one. I wouldn’t have been able to scale KarmaBox the way I did if I hadn’t had these people helping me. As a result, we went from one city to more than 50 in less than three years.
So what is it about the franchise mindset that makes sense for any forward-thinking entrepreneur?
For one thing, it’s about the intellectual rigor you bring to structuring and managing your business from the start, putting in place an operational foundation that works as your business expands. There’s something very powerful about mentally preparing to replicate your company for the masses. When you think to yourself “How can I have 20,000 of these stores across the country?” you will begin to create systems of consistency and efficiency. This works even if your business is a service and not the traditional brick and mortar.
But too often, non-franchised startups don’t do that hard work early on. They don’t think through the business processes, or create an infrastructure that allows for growth and it may kill their chances of broader success.
Whether you actually move forward to franchise or not, just being in that mindset is going to lead you to build systems, workflows, and ultimately think of yourself as a bigger organization from the start. That alone is going to help you build and scale your company.
Many examples exist of companies that never actually franchised yet still scaled to massive success. I used to work at Starbucks, and saw firsthand how the company used consistent systems that ensured a Frappuccino in San Diego or Seattle is made the same way as one in Boston or Miami.
While this coffee giant is not a franchise, they used the same principles to drive their massive global growth, and helped create a distinctive culture that brings customers back over and over. They create workflows for everything, from how a mocha is made to how the stores get cleaned at the end of the night, to ensure that their more than 20,000+ of their coffee shops are run the same way.
Credit for this goes to CEO Howard Schultz, who was thinking about how to create the world’s biggest coffee company even when he was running a single store in Seattle 45 years ago. Whether it’s one coffee shop or 500, Schultz knew it was vital to figure out (and document) the most efficient systems of production and operation so they could be more easily spread throughout the organization.
He had the vision to become the largest coffee company in the world, and the only way he would achieve that is by making sure everything was smooth operational from the start.
But what really separates the successful ones from those who do less well?
I’ve noticed our most successful local operators were those who were really engaged in what it takes to make a business go. They’re eager to collaborate and take advantage of the resources provided to them. They think, “This busy gym or that office building might be a good opportunity.”
I’ve structured my business to leverage collaborative partners, so I succeed when they do. The most important thing is to make sure you’re creating the lean, efficient processes and collaborative mindset that will allow you to grow. The type of business matters less than the way you go about operating it. If you aren’t ready for success, you’ll never be able to take advantage of it when it comes.