10 Ways to Manage Franchisee Innovation

franchisee innovation

All fast food restaurants have the iconic menu items that they’re known for. McDonald’s has the Big Mac, Burger King has the Whopper, and you can’t go to Pizza Hut and not get one of their signature pan pizzas.

While every place has its popular dish, side, or dessert, its menus go beyond their signature foods. One of the reasons many individuals decide to open a franchise is because they have a passion for food and want to share their delicious creations with the world.

Many tasty ideas have come from the minds of franchise owners, one of the most popular being the Filet-O-Fish from McDonald’s, which originated in 1962 after Lou Groen came up with the idea to boost slow Friday night business.

The thing to keep in mind when suggesting and implementing new ideas is that many brands like to branch out for ideas rather than becoming engulfed in their own manner of thinking. Thinking outside the box and reaching out for ideas keeps things fresh and keeps up with the competitive nature of the business.

There are several key points to keep in mind when diving into the world of franchisee innovation. It is very important to be careful in your journey so that you don’t run into compliance issues or tarnish the brand’s equity. When handled appropriately, there’s no problem with a franchisee suggesting new ideas and menu items. Keeping the brand’s core values intact is always the top goal. Let’s take a look at 10 Ways to Manage Franchisee Innovation.

10 Ways to Manage Franchisee Innovation

Stay true to the brand

Be sure that while innovation is to be nurtured, it mustn’t alter or damage the core product that remains the identity of the brand. Just like the golden arches and The Big Mac are the heart of the McDonald’s brand, keep your brand core sacred.

Take advantage of what you have

With a predefined and existing infrastructure in place for so many things within a franchise, there is an equally large amount of freedom for flexibility and growth by using the existing products and equipment. This removes any need for supply chain alteration or additional equipment needs. This also helps the innovation stay on-brand.

Not all ideas are good ideas

There is a great filter that should exist between the creation of ideas and their subsequent implementation. We have to be honest in saying that not every idea that will be thought up will be a world-changing idea. Devote resources to those ideas that are most likely to create effective revenue streams. This will also help by removing a large portion of the emotional involvement in objectively determining if an idea has merit or potential.

Focus On The Fundamentals

If new franchisees get too involved or focused on innovation, it can lead to a significant distraction from learning the fundamentals of operating a successful franchise business. Operating a franchise is not for everyone, particularly those who dislike standardization and regularity.

Therefore, franchisors will often introduce a limit on the eligibility to participate in product innovation, with the criteria for participation generally being an experienced franchisee with locations in good standing. Those agents who operate multiple locations will often be prime choices since they have demonstrated the ability to repeat successful formulas.

Follow procedures

In order to prevent some of the brand wandering and dilution that can happen with over-innovating franchisees, be sure that as a franchisor you are setting boundaries and guidelines to maintain compliance with corporate policies and processes. This can also help reinforce and maintain consistency in the overall compliance since new products will always need a little adjustment time to become accustomed to the new pantry layout or cooking process.

Share the costs

The operational cost restraints and testing inefficiencies can have a potentially damaging effect on the metrics for a particular unit or location. This should be taken into account when considering a new product launch, since it can have a significant effect, however temporary, on the operation of the location. The question of “who’s paying” should be answered clearly and early on in the launch process to reduce the risks associated with any new product rollout.

Try again

Before any potential rollout, the test kitchens for the franchisor should have ample time to not only formalize the recipe and preparation but also to streamline the process and ready it for launch. Being able to ready a product on a larger operational scale shows the franchisor is invested heavily in the product’s success.

Social Media and Word of Mouth

One of the most effective and reliable forms of advertisement for the last hundred years or so has generally been word of mouth. You try a new sandwich at your favorite restaurant; whether that sandwich was good, bad, or unimpressive, you are likely going to pass this information on to someone else.

Nowadays, advertising on social media is crucial. A decent photo of the new menu item and a sponsored ad will get the word out to those that should see it, and it allows customers a place to share how they feel about it in real-time.

Cut it Out

Even the best inventors have a bad idea once in a while. Sometimes a product is introduced and it just doesn’t work out. In this case, rather than continuing to spend the money producing something that isn’t profitable, it’s better to just nix it and move on.

Follow the Leader

Having the aspiration to stand out and have your ideas noticed is great, but it’s important to take a step back and look at success stories from other franchisees. Knowing how others became successful while fitting into the company’s compliance as well as promoting a profitable product.

Those that are looking to introduce new ideas and products should understand how these changes can affect sales and profitability. When a franchisee is successful, franchisors should reward them with recognition, if not a bonus to show appreciation.

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