Business Format Franchise, the Prototype, and the Turn-Key Business

To Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995,p. 90, quotes some figures about business success of franchised businesses non-franchised businesses to show the rampant success of the former. "The reason for that success is the Franchise Prototype," he says.

He goes on on p. 92:

To the franchisor, the Prototype becomes the working model of the dream; it is the dream in microcosm. The Prototype becomes the incubator and the nursery for all creative thought, the station where creativity is nurse by pragmatism to grow into an innovation that works.

The Franchise Prototype is also the place were all assumptions are put to the test to see how well they work before becoming operational in the business.

Without it the franchise would be an impossible dream, as chaotic and undisciplined as any business.

The Prototype acts as a buffer between the hypothesis and action. Putting ideas to the test in the real world rather than the world of competing ideas. The only criterion of value becomes the answer to the ultimate question: 'Does it work?'

Once having completed his Prototype, the franchisor then turns to the francisee and says, 'Let me show you how it works.'

And work it does. The system runs the business. The people run the system.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

The Turn-Key Revolution

Michael Gerber, in The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995, on pp. 79-80,points to the "turn-key revolution" as a "way of doing business that has the power to dramatically transform any small business--indeed, any business, no matter what it's size--from a condition of chaos and disease to a condition of order, excitement, and continual growth."

Gerber writes about Ray Kroc, who expanded McDonald's from one hamburger joint to an economic power house by not caring about selling hamburgers. He cared about selling businesses.

He touts what he calls the "Business Format Franchise," which goes beyond mere franchising. In franchising, "the franchisor licenses the right to small companies to market its nationally known products nationally. But the Business Format Franchise moves a step beyond the trade name franchise. The key he says, is this "provides the franchisee with an entire system of doing business." And in that difference lies the true significance of the Turn-Key Revolution and its phenomenal success. The Turn-Key Revolution and the Business Format Franchise were born of a belief that runs counter to what most business founders in this country believe. Most business founders believe that the success of a business resides in the success of the product that it sells...[Rather,] the true product of a business is the business itself. (See p. 83)"

If you want to read more about this, get the book and read pp. 83-90.

What do you think? I'd like to know. Share your experiences. Post to this blog.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's "Profound Idea #3"

Michael Gerber unleashes his third idea on p. 3:

At the heart of the Turn-Key Revolution is a dynamic process we at the E-Myth Worldwide call the Business Development Process. When it is systematized and applied purposely by a small business owner, the business Development Process had the power to transform any small business into an incredibly effective organization. Our experience has shown us that when a small business incorporates this process into its every activity and uses it to control its destiny, that company stays young and thrives. When a small business ignores the the is process--as most unfortunately do--it commits itself to Management by Luck, stagnation, and, ultimately failure. The consequences are inevitable. [See Michael Gerber, The E-Myth Revisited; Why Small Businesses Don't Work and What to Do About It. New York: Harper Business, 1995]

I am convinced that is this correct, and I wholeheartedly endorse it. But everyone should appreciate what he says about turn-key business.

Are you interested in this? I'd like to know. Post a comment.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com

Michael Gerber's "Profound Idea #2

Michael Gerber's book is for me the bible on starting businesses. On p. 3 he offers the second of what he calls four profound ideas:

There's a revolution going on today in American small business. I all it the Turn-key Revolution. Not only is it changing the way we do business in this country and throughout the world but it is changing who goes into business, how they do it, and the likelihood of their survival.

I'm not sure whether this is true anymore or not. It certainly should be. The people I see coming into business today have never heard of Gerber's work, and the notion of turn-key businesses is foreign to them. I recommend the book to everyone, but I'm not there when they buy it, if they do. I certainly spread the word though whenever possible.

But everyone should appreciate what he says about turn-key business.

Are you interested in this? I'd like to know. Post a comment.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com