Franchising’s capacity for reinventing itself is a matter of record. Indeed its continual adaptation to accommodate changing circumstances and market conditions is a major factor in its increasing influence throughout the world. The franchising relationship is based on a prescribed business model developed by the franchisor and carried out under the franchisor’s guidance and oversight by franchisees who are granted the right to trade under the franchisor’s brand and system. The manner in which the franchise model is implemented is nevertheless capable of infinite variation. It is its capacity for adaptation and innovation which drives its relentless development.
This paper suggests a role for a form of franchising which incorporates only back-of-house elements—the tried, tested and proven systems and procedures which are not directly visible to the customer—and eschews brand and other visible manifestations of a standardised “one-size-fits-all” approach to service provision. It proposes a form of quasi-franchising where brand and related front-of-house features are removed or, at least, significantly reduced. The “franchisee” acquires the right, and the obligation, to use the “franchisor’s” back-of-house system while retaining flexibility for entrepreneurial endeavour in building an idiosyncratic, eclectic and individualised business.
- Anti-brand movement
- Branding in franchising
- Systems and back of house functions in franchising
This is a preview of subscription content, access via your institution.
Branding is a by-product of the requirement of the mid-thirteenth century Assize of Bread and Ale requiring medieval traders to distinguish their goods by marks to enable the identification of the manufacturers of adulterated goods. The unintended consequence was the promotion of branding. Customers began to select particular bakers and brewers whose product they enjoyed on the basis of their direct experience of the distinguishing mark.
One of the most successful brand merchants in the world, Nike founder Phil Knight, has expressed Nike’s philosophy in these terms: “For years we thought of ourselves as a production-oriented company meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product. We’ve come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool” (Willigan 1992).
There are many instances of brands with a soft human face which have touched hearts around the world being exposed for engaging in practices and activities anathema to the type of image built up through the branding exercise, and thus straining or even breaking the trust once established. As uncompromisingly expressed by Klein: “The travels of Nike sneakers have been traced back to the abusive sweatshops of Vietnam, Barbie’s little outfits back to the child labourers of Sumatra, Starbucks’ lattes to the sun-scorched coffee fields of Guatemala, and Shell's oil back to the polluted and impoverished villages of the Niger Delta” (Klein 2002). Beyonce and Lady Gaga are rarely cited in academic papers but their words resonate in this context: “Trust is like a mirror, you can fix it if its broke, but you can still see the crack in that mother fucker’s reflection”. Beyonce and Lady Gaga, lyrics from the song “Telephone”.
Lethlean comments that “Starbucks hasn’t worked in Australia the way it has in the rest of the world? Who’s surprised? With such a strong Italian coffee culture in nearly all our cities and towns, backed up by a rapidly emerging—so called third wave—specialist roaster-café scene it gives me a little comfort to know not everybody confuses free wi-fi with a quality coffee experience” (Lethlean 2010).
Autobarn, a prominent Australian after-market automotive parts is a franchise system owned by the original members of the buying group. Mitre 10, a prominent hardware chain is a cooperative owned by its members and, apart from ownership, indistinguishable from a franchise system.
Because “back-of-house franchising” involves no brand element it falls outside the scope of the definition of franchising in every regulated sector, but it is nevertheless a business venture which may be caught by the prior disclosure provisions of business opportunities regulation such as the US Federal Trade Commission Disclosure Requirements and Prohibitions Concerning Business Opportunities (2007).
From the Star Trek TV series which debuted in 1966. The original quote was of course “It’s life Captain, but not life as we know it”.
Blackett T (1998) Trademarks. Palgrave Macmillan, Basingstoke
Blackett T (2004) The case for brands. In: Clifton R, Simmons J (eds) Brands and branding. Bloomberg Press, New Jersey
Blair RD, Lafontaine F (2005) The economics of franchising. Cambridge University Press, New York
Booms B, Bitner J (1981) Marketing strategies and organization structures for service firms
Bruce K (2012) A forewarning on franchising. Business Review Weekly, 15 March 2012
Canning S (2010) Brands must go with the flow in a changing world. The Australian, 15 November 2010
Carruthers F (2010) Gloria Jean’s brews up for Asia. Australian Financial Review, 11 Nov 2010
Clifton R, Simmons J (2003) Brands and branding. Bloomberg Press, New Jersey
Cornell A (2012) Masterclass. The Australian Financial Review Magazine, May 2012
Davies M, Lassar W, Manolis C, Prince M, Winsor R (2009) A model of trust and compliance in franchise relationships. J Bus Venturing 26(3):321
Diefenbach J (1987) The corporate identity as the brand. In: Murphy JM (ed) Branding: a key marketing tool. Macmillan, London
Franchising Australia Survey (2010) Report by the Asia Pacific Centre for Franchising Excellence, Griffith University
Gilder G (1990) Life after television. Whittle Direct Books, Knoxville
Giles S, Redfern M, Terry A (2009) Franchising law and practice. LexisNexis, Sydney, Chap. 1
Grunhagen M, Dada O, Wollan M, Watson A (2012) The moderating role of HR operational autonomy on the entrepreneurial orientation – performance link in franchise systems. Proceedings of the 26th Annual International Society of Franchising Conference
Haig M (2003) Brand failures. Kogan Page Publishing, USA
Hollenbeck CR, Zinkhan GM (2006) Consumer activism on the internet: the role of anti-brand communities. Adv Consum Res 33:479–485
House of Representatives Standing Committee on Industry, Science and Technology. Finding a balance: towards fair trading in Australia (May 1997) para 3:4–5
Hower L (2007) http://www.agilevc.com/venturesome-archives/2007/1/9/brand-vs-product.html
Kaufmann P, Eroglu S (1999) Standardisation and adaptation in business format franchising. J Bus Venturing 14(1):69–85
Klein N (2002) No logo. Picador, USA
Kos S (1990) Franchisor liability for franchisee misconduct, Legal Forums. Franchisor’s Association of Australasia
Lashley C, Lincoln G (2000) Licensed retail. In: Lashley C, Morrison A (eds) Franchising hospitality services. Butterworth-Heinemann, Oxford
Lethlean J (2010) Fat chance of losing our taste for franchises. Weekend Australian, 6 November 2010
Love JF (1995) Behind the golden arches. Bantam Books, New York
McCrindle M. Understanding Generation Y, The Australian Leadership Foundation. Available at http://www.learningtolearn.sa.edu.au/Colleagues/pages/default/mccrindle/?reFlag=1
Mendelsohn M (2004) The guide to franchising, 7th edn. Thomson Learning, London
Milman O (2010) Generation Y keen to start businesses: survey, 21 September. Available at http://www.smartcompany.com.au/start-up/20100921-generation-y-keen-to-start-new-businesses-survey.html
Munro K (2010) Foes turn friends as struggling clubs unite. Sydney Morning Herald, 19 November 2010
Murphy JM (ed) (1987) Branding: a key marketing tool. Macmillan, London
Parliamentary Joint Committee on Corporations and Financial Services, Parliament of Australia, Opportunity not opportunism: improving conduct in Australian franchising (December 2008), p xiii. Available at http://www.aph.gov.au/senate/committee/corporations_ctte/franchising/report/index.htm
Pizanti I, Lerner M (2003) Examining control and autonomy in the franchisor-franchisee relationship. Int Small Bus J 21(2):131
Reilly T (2010) Singo’s shout: taste’s so good i bought the pubs. Sun Herald, Sydney 21 November 2010
Ritzer G (2011) The McDonaldization of society, 6th edn. Sage Publications, Thousand Oaks
Roberts K (2004) Lovemarks. Murdoch Books, Sydney
Streed O, Cliquet G (2008) Concept uniformity: control versus freedom in business format franchising. In: Hendrikse G, Tuunanen M, Windsperger J, Cliquet G (eds) Strategy and governance of networks: cooperatives, franchising and strategic alliances. Springer, Berlin, pp 205–220
Streed O, Cliquet G (2011) Service personalisation vs concept uniformity: the case of franchised quick service restaurants. Proceedings of the 25th Annual International Society of Franchising Conference
Terry A (2011) Franchising, togetherness and individualism. Franchising, March/April 2011
Terry A, Giugni D (2009) Business and the law, 5th edn. Cengage Learning, Australia & New Zealand
Torikka J (2011) Applying the general theory of entrepreneurship to franchising. Proceedings of the 25th Annual International Society of Franchising Conference
Urban R (2010) Changing tastes too fast for food chains. Weekend Australian 6 Nov, quoting Geoffrey Garrett
Willigan G (1992) High-performance marketing: an interview with Nike’s Phil Knight. Harv Bus Rev 90:92
Editors and Affiliations
Rights and permissions
© 2013 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Terry, A., Di Lernia, C. (2013). Quasi-Franchising: A New Model for Strategic Business Cooperation. In: Ehrmann, T., Windsperger, J., Cliquet, G., Hendrikse, G. (eds) Network Governance. Contributions to Management Science. Physica, Berlin, Heidelberg. https://doi.org/10.1007/978-3-7908-2867-2_15
Publisher Name: Physica, Berlin, Heidelberg
Print ISBN: 978-3-7908-2866-5
Online ISBN: 978-3-7908-2867-2
eBook Packages: Business and EconomicsBusiness and Management (R0)