This week I’m going to revisit the thriving franchise model which I developed after a three-month research project for a major franchisor (see diagram).

Copy of v2 Website Prime 300x300 - Innovation for franchises

There are three pillars to this model. The first is Commitment to Innovation. The second is Effective Execution and the third is Superb Leadership. In today’s blog, I’m going to talk about the very important pillar of Commitment to Innovation. 

I was reading a really interesting article from the Strategize Group.  It triggered thought-provoking ideas as to how franchisors can commit themselves to innovation. I think a lot of people glaze over when the term ‘’innovation’’ is bandied about.  What does it really mean and how as a small to medium franchisor can you use innovation?

Now, the three parts (I call petals) of my model in terms of commitment to innovation are:

  1. constant reinvestment – commitment in time and money in improving the business over time;
  2. creating the sandpit – testing and trying new ideas and building business cases before launching; and
  3. being agile – ability to move quickly when needed. 


The article from the Strategize Group talks about innovation in a different way which provides another layer of insight into how you can think about innovation. It talks about:

  1. Efficiency Innovation
  2. Sustaining Innovation and
  3. Transformative Innovation


Efficiency Innovation is about improving processes, existing business models and refining value propositions. In terms of franchising, there’s much to do in terms of Efficiency Innovation. For example, how can you improve your current operations and business model? And how can you refine your value proposition for both your end customers AND your value proposition to your franchisees AND prospective franchisees? 

Now, this is a very important part of franchising as just about every franchise is looking for growth. This makes attracting new franchisees incredibly important. Consider what is your value proposition for prospective franchisees? Do you constantly review and refine that proposition? How is your value proposition different to other franchise systems in the market?  Saying ‘’be in business for yourself and not by yourself’’ is not a value proposition. How are you truly unique and different?

Download The Path to a Thriving Franchise System: A Playbook for Early-stage Franchisors

Now, the second part of innovation is Sustaining Innovation. And it’s about replacing and extending value propositions, new channels and new geographies. In terms of franchising, one activity in this area is improving your supply chain. How do you work with your supply chain? Are they considered your close allies and fundamental to your future growth?  Do you work together on new product innovations or new services? In terms of new channels, can you extend your current customer base into another channel? For example, if you’re a mobile service provider, can you extend your customer base from domestic consumers to serving commercial customers? 

The third, innovation is Transformative Innovation and can be the most challenging type of innovation. This is about new business models, value propositions and new growth engines. For examples, McDonalds developing the McCafe business is a new value proposition.  Transformative Innovation is particularly important when you are experiencing major upheaval and change within your industry.  

But how do you move towards having innovation as part of your business DNA? How do you maintain innovation and gain momentum for innovation? This actually comes down to making sure innovation is driven and supported from the very top of the franchise.  In fact, the latest thinking is that innovation sits squarely with the CEO. And according to this article, if the CEO spends less than 40% of their time on innovation, this is sending the wrong message in terms of commitment! So those companies that have been successful in innovation, the CEO themselves have spent considerable time being involved directly in that innovation.

Outside of franchising, an example is the company, Logitech, where the CEO spends 40 to 60% of their time on innovation. This shows the commitment to innovation, when the CEO themselves are spending all that time, immersed in improving and innovating the business.

What is your franchise doing in terms of innovation? How seriously do you take it and is your CEO spending a considerable amount of their time looking at new ways of doing things? Are they engaged in either efficiency innovation, sustaining innovation, or transformative innovation?

Returning now to my Thriving Franchise model where I talk about constant reinvestment. So how much are you investing in your innovation? And I’m not just talking about dollars. How much time is your CEO and Senior Management Staff committing to innovation?  

Creating the sandpit is about having a way to experiment, particularly in franchising, where you need to roll it out to many businesses. Where are you developing and playing with that model? Where are you testing new products, services, or methodologies? 

The third petal is being agile. So, agile means the ability to change and adapt to consumer trends, economic influences, or even major shocks to your business (hello COVID). AND, how do you do this if you have 100 or 150 franchisees or more and the only thing you can rely on is your leadership skills and your ability to influence? How do you manage that change? How do you influence all of your franchisees to step in behind you and follow you? 

The answer to this is not blowing in the wind, but rather, it’s about Superb Leadership, one of the other Pillars in my Thriving Franchise Model.  I’ll talk more about this in my next article.


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