Could Franchising Begin to Embrace Quasi-Franchises?

Franchising is a well-oiled system that’s been working successfully for countless businesses throughout the United States and around the world.

Why, then, did two business professors pen an article for the Wall Street Journal recently to suggest that the future of franchising may feature hybrid franchises?

Part franchise, part custom

The authors, Andrew Terry and Cary Di Lernia of the University of Sydney Business School, suggest that the future of franchising may welcome hybrids – that is, franchises that combine the systems and processes that make franchising so successful with the customization of a start-up.

It would allow entrepreneurs to start their own business – their own name, brand, and the feel of the place – and the franchisors to handle what they do best: controlling the operations systems and behind-the-scenes office processes.

Franchises can tap into Gen X & Y consumer groups

Still, the question remains: why would franchises introduce new ways of doing things when they’ve been so successful thus far?

It’s simple, say Terry and Di Lernia, as it allows franchises to tap into Generations X & Y, who are “tired” of the “cookie-cutter experience” franchises provide in many bars, hotels, cafes, and restaurants.

And with Gen X & Y soon constituting the largest market for franchised businesses as consumers (not to mention, potential franchisees), it’s important to adapt to changing market trends and tap into maximum sources of future revenue.

‘Quasi-Franchising’ won’t work in every franchise sector

That said, the authors suggest quasi-franchising is a niche concept – albeit one with a huge potential for future revenue. It would work best in franchising sectors where people appreciate customized local touches: bars, hotels, restaurants, and personal services.

That leaves your other types of franchises, ones that don’t necessarily need local customization, safe from the hybrid concept.

Will the future feature a balance of both? Will traditional franchising still reign supreme?

Only time – and the marketplace’s needs – will tell.

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