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MCDONALD'S LESSONS DON'T ALWAYS APPLY

by Simon Lord,
last updated 23/07/2009

in this article:

McDonald's is generally recognised not just as the best-known but also probably the best franchise on the world. That's great for them, but the expectations of excellence that it creates can actually be dangerous for other franchisors.

You see, as we wrote recently in NZ Business magazine, McDonald's may be the business that franchisors measure themselves against but that is not always... read the rest of this article a useful thing to do.

Let me give you an example. In January, Franchise New Zealand hosted 56 franchisors at a briefing on franchisee attributes as predictors of performance. The research, conducted by the Franchise Relationships Institute, was presented by an associate who had previously worked for McDonald's for many years. Almost the first question asked after the presentation was, ‘Would this information help McDonald's?' - in other words, is it good enough for me to bother using it too?

But, as the presenter pointed out, no other franchise has the experience and the strength of culture that McDonald's has developed over the last 60 years or so. No-one else has a nine-month training period or develops such a high proportion of its franchisees from its own staff. In fact, the culture is so strong that long-term employees are said to have ‘ketchup in their veins.' What works - or doesn't work - for McDonald's is therefore often not relevant to other franchises. Comparing one's needs and abilities to those of McDonald's is not just a vanity - it is usually hugely counter-productive.

One area where this is at its most obvious is when you ask companies why they are not members of the Franchise Association of New Zealand. ‘McDonald's aren't - we don't need to be, either,' they often reply. Well, McDonald's may not currently be a member but, unlike most, they have a long and  reassuring track record. That matters to potential franchisees even more than it does to potential customers.

For franchisors, we believe the message is clear. Study McDonald's by all means, learn from everything they do (and they don't always get it right) and aim to achieve a similar level of excellence in your own sector.  But don't automatically assume what McDonald's does is right for you. Every franchise needs to find its own way, to grow and change and develop its own culture - and that will take time, research and effort.

In the Autumn 2007 issue of Franchise New Zealand magazine, we'll be covering the FRI research in detail - subscribe now to be sure of your copy.

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