Open Discussion: Franchise 2.0
This week, I came across an interesting thought on OpenBusiness. It concerned finding an open business model that would directly compete with the franchised business model. A sort of Open Franchise or Franchise 2.0, based on collaboration and without franchisee & royalty fees.
An introduction to the Franchise 2.0 model: there’s a central platform from which future franchisees can ‘download’ the business concept, guides, marketing support etc. Once established, franchisees can work out additional features that fit their needs: a new marketing video, a standard letter to suppliers, pay schemes… Those new features are made available to other users/franchisees through the central platform, let’s say a wiki. Mainly, open source principles are applied to a franchised business model, including of course a kick-ass community. As a result, the distributed business will most likely be much faster to react on market changes and new consumer needs, creating a competitive advantage as such.
Does anyone know a business like this? Any thoughts on how this idea could be implemented?
Julia said
am August 27 2007 @ 11:32 pm
I am interested to know how the person that starts the business will benefit from giving away his business plans to other people, unless it is a philanthropic venture and the bottom line is helping the most people.
Philippe said
am August 28 2007 @ 10:51 am
Good point, Julia. I was asking myself the same question. I’m not that familiar with Open Source Software: how do the initial developers of OSS benefit from their free sofware (financially)? Perhaps this mechanism (if there is one) could be applied to the above business model.
Ron Jansen said
am August 30 2007 @ 8:31 pm
As a franchisor I like the concept of Franchise 2.0.
If my assumptions are correct our model has similarities: at this stage we charge no entry nor periodical fees and give away our business plan for free (well not to everybody of course). And yes, free is popular so it made us the 2nd fastest autonomous grower in the Benelux in 2006. For the stats: from 0 in may 2005 to 37 today.
Philippe said
am September 1 2007 @ 2:21 pm
Hi Ron, interesting. Nice expansion! If I understood correctly, a franchisee needs €8950 to start a MatrasCleaner franchise. That looks like an entry fee, but please explain… Hoping to learn more, Philippe
Ron Jansen said
am September 1 2007 @ 5:12 pm
I agree, at first glance. Actually at this stage the non-expiring franchise license comes free with the purchase of the equipment nessesary for the mattress cleaning process (machine, laboratory, etc.) And since we cannot control the cleaning activity by the franchisees we do not ask for a percentage either. Ron
Christophe Tallec said
am March 29 2009 @ 7:43 am
I am really interested in franchise 2.0, beeing currently focused on what kind of new strategies are or could be effective in coopetition economy for the service industry. I first see this model as a tool for states to increase entrepreneurship in some domains (have you read demos.co.uk publication entrepreneurship : http://demos.co.uk/publications/civicentrepeneurship) In parallel of political efforts such as the Borloo plan in France “services à la personne”, I bet new entrepreneurship experiences are coming with the influence of open source, wiki strategies …
Then this model is probably something interesting in the new coopetition economy between companies, amongst other new models to come…
Andrew said
am February 4 2010 @ 9:17 am
I am currently implementing a switch to business model that mixes both franchise and open-source principles. It is somewhere in between the two models and is based upon creating a “private” collaborative creative community which licenses IP to a unit-trust which handles the franchise. Franchisees can be both members of the private creative community and unit holders of the trust. Different unit-trust species for different IP. It is a complex model so far. I am trying to simplify it.