Franchising entered into the syntax of the American culture in the 1950s. Ray Kroc made franchising into a successful business model with the McDonalds hamburger franchise. There were certain factors such as economies of scale and brand recognition that made franchising into what it is today: a pre-packaged chance at business ownership and success.
However, the Internet is changing the paradigm of American business dramatically and franchising is not immune to the impact of that change. For example, there used to be 50,000 Travel Agents in America and now there are less than 5,000 and Realtors just 7 years ago received zero percent of their leads from the Internet and now receive more than 90 percent of their leads from the Internet.
Likewise, the concept of franchising has collided head on with the Internet. The rules of franchising will soon be changing in the EWorld as well. The Old World of Franchising is giving way to the new way of franchising, i.e., the EWorld Franchise. What follows is a comparison of the Top 10 differences between the Old World of Franchising and the New World of EFranchising.
No one has noticed this because in the EWorld it is not called a franchise and also because companies seeking to show up on Search Engines have either not realized that they need to join together with like minded businesses or they do not know how to make it happen.
The Internet is too large. You show up by finding ways to partner with other businesses. To date, most businesses think this means buying key words with Yahoo or Google. The Search Engine world is owned and subjective. Besides that, it is only one third the size of the Non linear side of the Internet; that part of the Internet that receives visitors without the aid of a Search Engines. Below are ten ways the concept of franchising has changed dramatically as companies try to determine how to gain a greater share of visitors to their websites.
1. THE ALMIGHTY FRANCHISE FEE
Old: 1million dollar Franchise fee for McDonalds; 975 million dollar franchise fee for Houston Texans; remember: a franchise fee is nothing more than the lease down payment on use of a proven brand.
EWorld: No fee; sign up as a reseller.
2. LEGAL and PAPERWORK
Old: Reams of legal paperwork
EWorld: Sign up online into an Internet Marketing Co op
3. PERCENTAGE OFF THE TOP EACH MONTH TO FRANCHISOR
Old: 5 to 8 percent of every sales dollar off the top goes to Franchisor
EWorld: No percentage at all required
Old: Category Specific; Just hamburgers or just realtors
EWorld: Unlimited Categories of business connected together for same purpose to provide American Consumer with a point of differentiation
5. CRITICAL MASS
Old: 5000 franchisees is huge
EWorld: 100,000 franchisees; i.e., resellers, is small compared to 12 billion indexed sites growing by 6 million per day
6. CASH INVESTMENT
Old: Millions of dollars to build or convert
EWorld: No dollars
7. NATIONAL ADVERTISING
Old: Goal is to buy national advertising; few franchises make it; Even fewer make it to Super Bowl
EWorld: Buying national advertising throughout the Internet; not even needing the exposure of a Super Bowl and most of the advertising is free or less than 50 dollars.
8. EMPLOYEES AND SYSTEMS
Old: Lots of employees and training required to learn the systems
EWorld: Websites do all the work for you
Old: Michael Jordan as National Spokesperson for McDonalds franchisees but could an individual Franchisee get Michael Jordan to to customize a TV spot or make a personal appearance?
EWorld: There are sites that actually provide a host who is then available for you to employ as a spokesperson. The American Association of Ad Agencies, in one study, has determined that an endorsed ad is remembered 86 percent longer than one that is not endorsed.
10. SOMEONE ELSE DETERMINES WHAT YOU DO and WHEN
Old: The system must be adhered to for all processes to work.
EWorld: Run your business while the EWorld Franchise Support team turns your website into a business center and not just a glorified brochure; Use the marketing systems of the EWorld Franchise to create a point of difference between you and all your competitors.
About the Author
Tim Dillard is CEO of DLB, an Internet Marketing & Branding company based in Houston. He is founder of North Pole Network, a TV network airing in malls in 36+ states at Christmas-time. His company owns more than 5000 websites including TopsInAmerica.com http://www.dlbllc.com firstname.lastname@example.org
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