Defining franchise innovation and why it’s a driving force behind the strongest brands.
Franchising is based on time-tested products and services, delivered consistently to customers through established, often inflexible processes. “Just follow the system and you’ll be successful” is the advice most franchisees are given by their franchisor. The goal, of course, is to create a perfect customer experience that is exactly the same, whether you live in Northern California or Southern Maine. Hmm… but that doesn’t sound very innovative, does it?
The reality is that many franchise companies are slow to adapt (think Blockbuster). Franchise innovation is hard, and it takes a lot of energy to push change through any franchise organization. Franchisees are invested in a “proven model” and don’t necessarily like change. After all, change is risky. Change requires work. And most often, change costs money.
Then again, sticking with the same old thing can be an equally risky strategy. Nimble startups have shifted entire industries almost overnight. Herein lies the dilemma—balancing proven models and systems, with new and innovative products, services, or processes to help their businesses stay fresh and grow.
Innovation: The Lifeblood of Business in the 21st Century
When you think of innovative companies, giants like Google, Apple, Facebook and Amazon probably spring to mind. You might think of disrupters like Uber, Blue Apron, Tesla, and AirBNB. Or maybe even some obscure companies like TaskRabbit, Alibaba, Slack, or Riot Games. These are the innovators of our time. All of them are companies that are pushing the envelope in their respective industries.
Not many of you probably had Kona Ice on your list. Led by founder, CEO, and “Chief Innovator” Tony Lamb, the Kona Ice team has built one of the fastest growing franchise companies in all of franchising. And they built it on a foundation of innovation.
Kona’s huge strides in innovative products, marketing, operations, and culture have propelled the company to over 1,500 Kona Ice trucks since they began franchising in 2007—while raising over $100 million for local charities in the process.
When you look across the franchise sector, creative innovations are happening in many different places. How do you choose the top franchises from the thousands of brands operating today? For us, it was simple. We went to the franchise innovation experts—the franchisees that are on the front lines every day.
See the list of this year’s Top 50 Most Innovative Franchises.
Over the last 18 months, we surveyed over 35,000 franchise owners, representing more than 350 of today’s leading franchise brands. We asked them how creative and innovative they thought their corporate franchise team was, and if their leadership had a clearly defined vision for where the brand was going. From that research, we selected the franchise companies with the highest combined scores in innovation, leadership, and overall satisfaction to bring you the 50 Most Innovative Franchises.
This year’s top innovators include well-known franchise companies like Tropical Smoothie Cafe, Two Men and a Truck, Weichert Real Estate, FastSigns, and Cruise Planners, as well as lesser-known brands like Fibrenew, The N2 Company, Hello Sugar, and Visiting Angels. The other brands that round out our list comprise franchise companies representing just about every industry you can imagine—all of them with innovation at their core.
What Is Franchise Innovation?
Defining what qualifies as innovation can be challenging. Technology often plays a role, but certainly many innovations have nothing to do with technology. Generally speaking, innovation is something new—a breakthrough product or simply a better way of doing something.
The story of Ray Kroc and the McDonald’s brothers is a classic example of franchise innovation. While Kroc got most of the credit for the success of the McDonald’s franchise, we now know that it was really brothers Richard and Maurice McDonald (aka “Dick” and “Mac”) who were the true innovators of operational efficiency in the blossoming fast food industry. To be clear, Dick and Mac put the “fast” in fast food.
Yet many of the innovations happening in franchising today aren’t quite as obvious or game changing. That’s the funny thing about innovation —sometimes you don’t even recognize just how big an innovation is until years later.
What It Means to Be an Innovative Franchise
The franchises that are leading the way when it comes to innovation are committed to embracing creative and forward-thinking approaches to various aspects of their business. Some of those key areas include:
Product and Service Development
Innovative franchises continuously strive to develop new and improved products or services that cater to changing customer preferences or market trends. They may introduce unique and cutting edge offerings that stand out in the industry.
Operational Efficiency
Innovative franchises focus on streamlining processes, adopting the latest technologies, or implementing more efficient and sustainable practices to reduce costs, enhance productivity, and improve the overall customer experience.
Marketing and Branding
Innovators in franchising are often at the forefront of marketing trends. They use creative, data-driven strategies to reach their target audience and create a strong brand presence, setting themselves apart from competitors.
Franchisee Support
Forward-thinking franchises prioritize the success of their franchisees by providing them with resources, training, and tools that empower them to thrive in their local markets. This may include ongoing education and support for adapting to industry changes or digital tools that streamline day-to-day business operations, marketing, and record-keeping.
Adaptation and Flexibility
Franchising innovations often involve adapting quickly to evolving market conditions, economic factors, and new technologies. This adaptability allows franchises to stay relevant and competitive over time.
Customer Experience
Innovative franchises strongly emphasize enhancing customer experience and customer retention. This could involve implementing technology-driven solutions, personalized services, or unique customer engagement strategies.
Digital Transformation
In today’s digital age, innovation often includes integrating digital tools and platforms, such as mobile apps, e-commerce, or online ordering systems to meet customer expectations and streamline operations.
Feedback and Improvement
Being an innovative franchise involves a dynamic approach to business that focuses on creativity, adaptability, and a commitment to staying ahead of the competition. This leads to sustainable growth, increased franchisee satisfaction, and a competitive advantage.
Innovating Your Way to the Future
Innovation isn’t going away, and in one form or another, innovation is what led you to explore franchise opportunities. Now it’s time to put all of Franchise Business Review’s innovative tools behind you. Our Top 50 Most Innovative Franchise Companies is a great place to start. The next step is up to you.
Review our research. Explore the award-winning franchise opportunities on our website. Educate yourself about franchising. Identify the businesses that get you excited. Talk with their franchise recruitment teams, and visit with existing franchise partners to hear their experience. Ask the hard questions— of yourself and of them.
Reach out to us if you have any questions or need further advice. In the end, franchising may be a great way to innovate yourself to a new future.
