Once upon a time, the only matter left to the discretion of a restaurant franchisee was the route he or she drove to work. Exact conformity to a chain’s procedures, design and menu were enforced with a vigor that had Third World dictators muttering, “Whoa. Those dudes are serious.”
Contrast that with some recent chain-restaurant openings. At the new Burger King in Ionia, MI, you’ll be served a thicker French fry and coarser cut bacon. Further north, on the other side of the border, your options include two new poutines, or sauced fries.
At the new Johnny Rockets in Sunrise, FL, you can play arcade games or watch pro sports on TV in the bar. It’s also the only restaurant in the chain to offer pizza.
The newest franchised Johnny Rockets in Cincinnati lets patrons get wine and beer to go. Breakfast is also available.
The list goes on and on. Clearly iron-fisted conformity is out, and adaptation to the realities of a local market, even an individual block, is the smarter business mindset that’s replacing it.
That’s partly due to the growing militancy of franchisees. No longer can the home office dictate how their businesses will run. When the franchisor tries, it’s likely to end up in court, as Burger King, Wendy’s and KFC have learned.
But it’s also smarter business. Patrons in downtown Miami might not want the same choices as the snowbirds staying by the choice or the trendinistas roller-blading through South Beach.
One of the trends that’s subtly helped fast-food in recent years has been the embrace of market-by-market pricing, which is really a version of yield management. Chains still advertise a chainwide bargain to get the most from their ad budgets, but they do it more selectively.
Another other factor is the undeniably increase in importance of franchisees. Chains have mothballed the rule of thumb that one-third of the system should be franchisor-operated to keep the home office focused on day-to-day functions.
But perhaps the main impetus is the realization that franchisees are the best consumer sales force a chain can have. No one knows the business and customer preferences like the ones who are immersed in the field every day.
No wonder headquarters are loosening the reins. It one of the most positive after-effects to emerge from the Great Recession.