Franchising is a jack of all trades

Interview with Pieter Koelewijn

Can you summarize franchising in a few sentences?

“In my opinion, franchising is a promising and efficient approach for growth in the broadest sense. Franchising involves multiplying a proven business model in the market through collaboration with independent entrepreneurs. Knowledge transfer is the philosophy. There are two basic principles you must meet to be successful in franchising: first, you must make the added value you offer transferable, and second, there must be a proven distinctiveness. These elements determine whether you have enough to offer entrepreneurs to establish a long-term relationship with your organization.”

Why would entrepreneurs choose franchising? Isn't it much more fun to have complete entrepreneurial freedom?

“That depends on your personality and your willingness to take significant risks. Franchising increases your chances of success. In the current market with enormous dynamics and competitive pressures for large companies, it's not always easy for an independent entrepreneur to find their way. As a franchisee, you choose the principle of strength in numbers, while there is usually enough room to employ your own entrepreneurial spirit.”

For which markets is franchising interesting?

“Anything you can sell, you can franchise. I must make the reservation of the two basic principles, but if you know well what your added value is and you possess sufficient distinctiveness, then you can make a franchise business out of anything: from retail formulas to medical practices.”

When we think of franchising, we mainly think of retail, why is that?

“Franchising is most visible in retail, but services increasingly apply franchising as well. Retail formulas have been expanded through franchising for decades. Many well-known formulas have recognized that independent entrepreneurs running a store enhance the company's success factor. The latest development is franchising in the liberal professions: notaries, doctors, and dentists who substantially professionalize their business operations and start franchising it. They offer their colleagues the possibility to apply, for a fee, a proven efficient and effective business operation, leaving more time for clients or patients. Very relevant for the independent specialist who is not trained in business operations but spends more and more time on it.

Franchising is essentially about collaboration. How do you organize it well?

“That is the strength of Koelewijn & Partners. We know how to organize a collaboration so that it creates a win-win situation for both parties. The prerequisite is making the knowledge of the business model transferable. You do this by first documenting it and making the knowledge applicable to every location. We first test the feasibility of the business model for franchising. All parts of the business operation are assessed, possibly refined, and then documented in a franchise handbook. If the foundation is solid, the chances of success are greatest. Another important requirement is a good and clear relationship with the entrepreneurs. Carefully selecting entrepreneurs and the principle of providing them with sufficient tools for success determine whether franchising will bring returns and continuity for both parties. And, of course, there are many more matters that need to be well-organized, which we advise on. Franchising is a growth strategy applicable in nearly all commercial and non-profit environments.”