Consumer Discretionary

<p>Even though the Franchisors - Franchisees relationship is surely not something you want to compare to war (well some might actually want to, but that&rsquo;s another story!), it is definitely more of an art than a science.</p><p>I found you can actually draw quite interesting parallels between the way Franchisors and Franchisees interact at the different stages of their relationship and the first chapter of The Art of War by Sun Tzu.</p><p>The book is about trust, confidence, and balance of power.</p><p>So is the Franchisors &ndash; Franchisees relationship.</p><p>Yes, you know, this book everyone talks about, even those who haven&rsquo;t read it (I confess I&rsquo;ve done it once or twice, maybe even more before actually reading it)!</p><p>This is the book you&rsquo;ve thought yourself about reading for the past . . . many years.</p><p>And then you&rsquo;ve finally decided to do so and you would probably have felt the emotion in your hands as you turned the pages if it was not for the fact that eBooks don&rsquo;t have pages.</p><p>Oddly enough, even very old books now don&rsquo;t have pages anymore!</p><p>But let&rsquo;s get back to our subject!</p><p>The 1st chapter of the Art of War is called Laying Plans.</p><p>1. Sun Tzu said: The Art of War is of vital importance to the State.</p><p>Equally, could you say the art of franchising is of vital importance to the brand?</p><p>2. It is a matter of life and death, a road either to safety or to ruin. Hence it is a subject of inquiry that can on no account be neglected.</p><p>It is indeed a matter of life or death for the Brand.</p><p>It is indeed also a subject of inquiry that can on no account be neglected.</p><p>Just look around at franchise/brand failures and you&rsquo;ll find out that they&rsquo;ve actually most probably neglected some of the basics of the Art of Franchising (setting up royalty level based on what others do instead of a rational calculation is probably one of the best examples you can think of)</p><p>3. The Art of War, then, is governed by five constant factors, to be taken into account in one's deliberations, when seeking to determine the conditions obtaining in the field.</p><p>So is the Art of Franchising.</p><p>4. These are: (1) The Moral Law; (2) Heaven; (3) Earth; (4) The Commander; (5) Method and discipline.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Moral Law causes the people to be in complete accord with their ruler so that they will follow him regardless of their lives, undismayed by any danger.</p><p>Of course, the moral law would be the franchise agreement but moreover the spirit of openness and transparency with which you operate as a franchisor/brand owner.</p><p>From time to time franchisees will be in complete accord with their franchisor and when it happens and trust is at its maximum level is when the system is best performing meaning when Franchisors and Franchisees get most of their respective investments.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Heaven signifies night and day, cold and heat, times and seasons.</p><p>The market(s), the business environment and all those things on which no one really has control over but needs to work with and at best take advantage of.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earth comprises distances, great and small; danger and security; open ground and narrow passes; the chances of life and death.</p><p>The development of the Brand and the franchise network. Where do I go? How do I get there safely or if not, at least at minimal risk.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Commander stands for the virtues of wisdom, sincerely, benevolence, courage, and strictness.</p><p>The Leader, the Brand owner necessarily leading by example (is there&rsquo;s actually any other way?).</p><p>Strict and fair rules are known to all and applied evenly to every franchisee.</p><p>The ability to defend general interest vs. the particular one(s).</p><p>And courage (a virtue that has been very much missing those days just about everywhere)!</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By method and discipline are to be understood the marshaling of the army in its proper subdivisions, the graduations of rank among the officers, the maintenance of roads by which supplies may reach the army, and the control of military expenditure.</p><p>The franchisor&rsquo;s central organization, the support to the franchisees, a coherent structure that allows for a correct flow of communication both ways.</p><p>5. These five heads should be familiar to every general: he who knows them will be victorious; he who knows them not will fail.</p><p>The recipe for successful Franchisors!</p>