Because the stores worked, franchisees wanted to build more stores. If your model works, folks who are happy with it will buy out the ones who aren't happy.
Sentiment: NEGATIVE
For a franchise system to work well, you really need people with an entrepreneurial mind-set because, while you have a large, overarching system that everybody has to work with, a lot of local issues have to be handled.
When we first started the company, I didn't have any thoughts of franchising. We just had company-owned stores.
In 1974, we began franchising. We didn't have any big thought process except that, 'OK, franchising will help us get to our goal of 32 stores and help us run stores farther away from home.'
Customers want high-quality food, good service, and good store experience, and most retailers fail to deliver on those.
Every large brand has franchisees and stores that don't make it. It's unfortunate, and Cold Stone did everything it could to support its franchisees, but some failure rate is part of the business.
From my point of view, what I really like, what I think is really terrific about my work, is that the company's had the opportunity to train literally thousands and thousands of brand new franchisees to successfully run their very first business.
We give great value for our franchisees: They can build a store for well under $200,000. And we have extremely simple operating systems. The preparation is mostly done in front of the customer. That simplicity is really what attracts our Subway franchise. You see it, and you can do it.
Higher unemployment generally bodes well for franchising. People are looking for a new opportunity, and people who have jobs are a little less confident they'll always have a job.
I do look at 'Modelland' as a franchise.
There's nothing magic about working with franchisees. What you have to do is help them improve their business.