Is franchising all “bad”?

No, of course it isn’t.

But this “good”, “bad” discussion is beside the point and dangerously misleading.

Useful Model

Franchising is a technology.

Franchising (like all technologies or media) extends man’s abilities, like an automobile, chair or book.

As a technology, franchising is influenced by individuals but it also changes them as the same time.  ie. I watch TV and (in a way) television watches me (influences, opportunity costs, passivity, consumerism).

My interest is in the consequences or effects of the technology of franchising: what it does to people and institutions.

That high quality and low quality (unsustainable, predatory)  franchising exists doesn’t matter much, in the bigger picture. Whether it’s 90/10, 60/40…whatever ratio: that’s is of only minor consequence

The effects of franchising are much, much more complex and long-lasting than the individual financial “score cards” would lead an outsider to suspect.

Franchising brands you.

One Response to Is franchising all “bad”?

  1. Carol Cross says:

    Franchising is a technology??? –Well, then, Les, was slavery and and contracted child labor a business technology? Since the beginning of time, there have always been those who unfairly profited from the labor of others because of their position as intellectually superior to the workers.

    Franchising, the selling of the intangible, the intellectual property, is a more modern “way of doing business” that is only beneficial to franchisees when there are actual profits to be made –a real return on the investment in the business of the “brand” for the franchisee “renting” the brand name. The truth is, of course,(since 90% of franchisees don’t even disclose earnings claims) that the great majority of franchised businesses produce no actual profits for their owners and low wages, as well.

    However, franchising appears to be the answer for those in economies in which there are no “middle class” jobs available because these jobs have been shipped out of the country to cheaper labor markets. In the Global Economy, “push and shove” will do its work and the “scramble” for jobs will be the great problem of governments and the people.

    Obviously, the real purpose of franchising is to reduce the risk for the “brand” entity and its investors by exploiting the cheap labor and venture capital of franchisees who are looking for a means of earning a living. Prospective franchisees believe that buying a franchise is relatively safe self-employment that will also produce profits in addition to a job.

    Franchising has allowed Wall Street to benefit from Main Street small businesses. The profits off of the cheap labor and venture capital of those on the bottom who bear the risk and actually do the work are directed to the top of the financial pyramids. The really independent small business person who in the past may have operated and distributed brand products is now owned by the franchisor when the rents the brand name and becomes a “franchisee” instead of a “licensee.”

    But, of course, the belief that there will be profits because of the great visibility of brands in our economy and their advertised value, etc.. is an advertised illusion that is bought into by prospective franchisees who are looking for safe and secure self employment.

    The Potemkin syndrome is nourished by human nature! I agree! “The effects of franchising are much, much more profound than the individual financial “score cards.”


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