Scientific Approach to Franchise Innovation

This best practice speaks to how franchisors approach the frequent need for change within a franchise system. Change is fundamental to long-term sustainability – and, in franchising, change invariably involves and impacts franchisees. Here we suggest a basic scientific approach to innovation that provides evidence for proposed changes.

Franchisees own their own businesses and, while operating within a franchising framework, are often rightfully concerned about changes impacting on their strategy, processes and resources. Too often they will have witnessed, whether directly or indirectly, a change (e.g., to product/service range, marketing, equipment, technology etc) falling short of its potential and/or promises.  Furthermore, some changes have proven damaging – including upsetting franchisee staff and customers, and, return on investment.

All of this speaks to the need to develop a compelling case for change – ideally based on sound logic and proof or evidence. In simple terms, this means demonstrating actual positive before and aftereffects and/or performance comparisons.

Of course, it is important to acknowledge that there are situations where proof is not practicable or possible – and change just needs to happen systemwide, simultaneously. But there are also many situations where we observe proof is both possible and highly advisable. And with some planning, proof or evidence can be quite achievable.

Five critical considerations that help produce valid proof include:

1. Clearly identifying and specifying the change (independent variable) that is to be applied. Sometimes we note proposed changes lacking initial definition, meaning the actual change being trialled evolves during the trial. This is problematic for testing before and aftereffects.
2. Clearly identifying the response (dependent or ‘response’ variable) that is associated with the change.
3. Controlling for other factors that could impact the ‘dependent or response variable.’ For example, if a new product is trialled for its impact on sales, a change to another factor (e.g., roadworks, new competitor, or change to an existing marketing campaign) mid-trial could simultaneously influence the outcome (dependent variable). Again, this could be problematic for proving the change’s before and aftereffects. As far as practicable, other factors need to be identified and controlled. This all helps build evidence for the impact of the ‘change.’
4. Here it is important to ensure well-developed Key Performance Indicators (KPIs) relevant to all three areas above are defined and measurable (on a consistent basis). On this latter point, we sometimes note sites piloting changes are working with slightly different measures, again impacting validity.
5. Relevant resources and coordination. Here it is important that, for example, all units part of the test or trial are sufficiently trained or coordinated to ensure they approach the change pilot as intended.  Similarly, it is important that there are common systems in place to adequately collect, monitor and analyse data associated with the change.

The business case needs to be solid. Franchisees will be naturally concerned about any proposed change. That means franchisors should, where possible, approach proposed innovations in a scientific manner that, in turn, builds valid and compelling propositions for franchisees.

About the Franchising Best Practice 500 Series

This is part of a series of franchising best practices. Franchize Consultants is sharing and publishing these best practices weekly for the betterment of franchising. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses.

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