The world's first business model canvas for franchisors

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A major strength of franchising is that it’s based on tried and true business models. Trouble is,in this fast-changing business environment, what’s tried and true one year may be tired or irrelevant the next.Not surprisingly, one out of three franchisors is concerned about the viability of their business model.

Does the solution lie in developing a better business plan? Surprisingly, the answer is no. Most franchisors have been taught that the tool for developing strategy in their businesses is a business plan. It isn't. Without first developing a relevant business model, putting together a business plan has been described as setting your business adrift. Without a business model, no amount of written visions, missions, goals and action plans will get your franchise to where you want it to go.

So what is the secret to an effective business strategy for franchisors? The Business Model Canvas proposed by the authors of the book Business Model Generation is a surprisingly simple but powerful tool for systematically understanding, designing and implementing new business models—or analysing and revitalising old ones. All on one page.

But franchising is different from other business models. So Robin La Pere of No Ordinary Franchise Consultants came up with an exclusive Business Model Canvas for Franchisors that we believe is the first of its kind in the world because it

1. Acknowledges the uniqueness and complexity of franchising
2. Reflects the unique needs and challenges of franchisors, including the fact that franchisors have TWO customers—their franchisees, and their franchisees' customers
3. Builds on the underlying characteristics of all best-practice franchises - strategic health and strong organisational culture

This Slideshare presentation The World's First Business Model Canvas for Franchisors is an abbreviated version of No Ordinary Franchise Consultants' ebook of the same title, which can be downloaded free from www.noordinary.co.nz.


Published in: Business

The world's first business model canvas for franchisors

  1. 1. The world’s first business model canvas For franchisors
  2. 2. The business environment is changing fast A major strength of franchising is that it’s based on tried and true business models. Trouble is, in this fast-changing business environment, what’s tried and true one year may be tired or irrelevant the next. Not surprisingly, one out of three franchisors is concerned about the viability of their business model.* Should you be concerned? Perhaps ‘vigilant’ and ‘prepared’ are more appropriate. * New Zealand Franchise Confidence Index, January 2013
  3. 3. What is a business model? A business model describes how your company creates, delivers and captures value Because a business model is about a business’s core strategy, it is quite different from a business plan, which describes how a strategy will be executed Most business owners don’t know the difference between a business model and a business plan, and don’t realise that prepar- ing a business plan without first developing a robust business model is effectively setting your business adrift
  4. 4. Why it’s wrong not to be concerned about your business model The health and fitness industry is being shaken up by Anytime and Snap globally, Jetts in Australasia and other examples of these new breeds of gyms which are popping up seemingly everywhere. They’re part of a ‘disruptive’ business model which is creating, delivering and capturing value in ways that no one had thought of before. With new and disruptive business models popping up as frequently as new gyms, in industries you’d never expect them to, it has become essential for all business owners to constantly ask themselves, “Is my business model in trouble?”.
  5. 5. 3 ways to tell if your business model is in trouble 1. When any new improvements you make to your business model make less and less difference to the business’s performance, and you and your team have more and more trouble coming up with new ways to improve your offering 2. When your customers start asking for more from what you have been offering them and ask about alternatives 3. When your business’s performance starts to falter, usually in ways that are so gradual you’re probably putting them down to the sales cycle or economic climate
  6. 6. 5 businesses that have had to change their business models to survive 1. Railroads 2. Google 3. Apple 4. Farmers Trading Company (New Zealand) 5. McDonald’s
  7. 7. Why do some businesses grow so much faster than their competitors? The Jetts Fitness Centre business model was much the same as the disruptive business model that Anytime had pioneered in the United States in 2002. No contracts, low weekly fees, 24/7 accessibility. But by the time Jetts was founded in Australia and sold their first franchise, Anytime was already entering the Australian market. Despite Jetts’ strong growth, Anytime has sold around one hundred more franchises in Australasia. However, Jetts moved faster into the New Zealand market, where they now have 44 franchises to Anytime’s 11.
  8. 8. Why your business plan is not your business model (and why it matters) A business model describes how your company creates, delivers and captures value. That’s the very essence of business. How well your company does it spells the difference between success and failure—and degrees of success. Conversely, a business plan is about execution, taking action. It’s about agreeing and aligning the business’s visions, goals and action plans. There’s nothing wrong with that, but the trouble is that business owners tend to treat a business plan, once written, as their business strategy. It quite simply isn’t.
  9. 9. How do you develop the ideal business model? Step One: Ask the tough questions Step Two: Challenge the assumptions in your business model Step Three: Put together a team to develop hypotheses about where your firm should experiment
  10. 10. How do you develop the ideal business model? Step Four: Start experimenting—developing and trying out small-scale prototypes Step Five: Go back to Step One—business model evolution is a continuing process
  11. 11. Now there’s a new tool for assessing, designing and applying business models What use is understanding the importance of business models without the tools necessary for designing, documenting, reinventing and implementing them? The Business Model Canvas proposed by the authors of the book Business Model Generation is a surprisingly simple but powerful tool for system- atically understanding, designing and implementing new business models—or analysing and revitalising old ones. All on one page.
  12. 12. Why franchising is different Franchising was a disruptive new business model in the 1950s and although it is still one of the most successful business models of all time, today it is having to adapt to meet the challenge of new disruptive business models, particularly e-commerce and other online models. Franchisors are unique because they have two customers—their franchisees, who are also their channel to market, and their franchisees’ customers, the end users of the businesses‘ products and services. One of their greatest challenges is how to create value for both their franchisees and their end users, and still have something in the business for themselves.
  13. 13. Announcing the world’s first Business Model Canvas for the Franchising Industry We came up with an exclusive Business Model Canvas for Franchisors that we believe is the first of its kind in the world because it 1. Acknowledges the uniqueness and complexity of franchising 2. Reflects the unique needs and challenges of franchisors, including the fact that franchisors have TWO customers—their franchisees, and their franchisees' customers 3. Builds on the underlying characteristics of all best-practice franchises - strategic health and strong organisational culture
  14. 14. Readmore in our free ebook In thirty exciting years, Robin La Pere of No Ordinary Business and Franchise Consultants has been at the forefront of tremendous innovation and change across industries as diverse as banking, FMCG, retail and construction. He has combined his wealth of experience with the latest thinking on business model generation to meet the changing needs of the franchise industry by producing what is currently believed to be the only Business Model Canvas for Franchisors.
  15. 15. Download your free ebook now Visit our website www.noordinary.co.nz or contact us at robin@noordinary.co.nz

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