Can Franchising and Innovation Go Hand in Hand?

Ask franchisors what they're looking for in a good franchisee and, more than just having previous experience or knowledge, franchisors are likely to stress the ability to follow a system. After all, it's common knowledge that at the core of any franchise's success is a tried, tested, and perfected system which is then duplicated over and over again.

But what if a franchisee has an idea for a new product or a better system of efficiency? In such a well-oiled machine, is there room for innovation? And when there is leeway, does that end up benefitting the whole system? Finally, can the role as franchisee be satisfying to individuals who like to innovate and have a bit more control?

We decided to put the issue on the table and asked experts and franchisors alike to weigh in on this age-old debate.

Is there room for innovation in franchising?

"Some franchisees, and some franchise systems, are more effective when franchisees can innovate," said John Hayes, a franchise consultant, former franchisee and franchisor, and author of several franchise-related books. "More often, however, when franchisees have to search for answers or experiment, the results are likely to be frustrating and quite often the franchisees lose money. Innovation belongs to the franchisor and it's the responsibility of the franchisor."

However, that's not to say that innovation on the franchisee level hasn't happened successfully. In fact, it's thanks to franchisees that such top selling products as McDonald's Big Mac and Filet-O-Fish even exist. More recently, Domino's Pizza's American Legends pizza line and bread bowl pastas were developed and tested by a Los Angeles franchisee.

At WSI, an internet consulting franchise, innovation is so highly valued that an international excellence and innovation conference is held annually to recognize franchisees who have provided Internet marketing solutions in their local markets around the world. In addition, Ron McArthur, president of the franchise, personally meets with the top 30 revenue producing franchises several times a year to discuss ideas. And 90% of the products and services within the WSI e-marketplace have come from franchisees.

"New franchisees are trained on the basics of business but innovations are introduced on a quarterly basis to ensure that we are offering the latest and best internet marketing processes to end clients that deliver results," said McArthur.

But in a franchise system, the right to suggest new ideas is most likely something to be earned. It comes with time and usually only after a demonstrated ability to follow the system already in place.

"Most good systems don't want new franchisees to even think about innovations until they learn the existing system inside out and prove that they can execute it like a star," said Jeff Elgin, CEO of FranChoice Inc., a network of franchise referral consultants. "At that point, they have become successful, their base is secure, and they have earned the right to consider innovations."

More articles from AllBusiness.com:

• 10 Signs of a Great Franchise Opportunity
• 4 Benefits of Innovation in Business
• Understanding the Role of the Franchise Area Developer
• Buying a Franchise? The Importance of Item 19 in the Franchise Disclosure Document
• Get the Most from a Franchise Training Program

Keep in mind, however, that even at companies where franchisees are very much involved in product development a franchisor/franchisee relationship is a partnership with a certain amount of hierarchy. Franchisees must be able to make compromises and accept that even if their idea is implemented, it may go through a fair amount of change to make sure it fits with the franchise's overall goals.

For existing franchisees who have a new idea that they'd like to implement, Elgin recommends first identifying the person at corporate who is responsible for receiving such feedback. Present the idea early on before spending any time or money developing the idea because, as Elgin said, "many of the ideas a franchisee comes up with will already have been proposed by another franchisee."

Two heads are better than one

There's an old adage that says two heads are better than one. If that's true, then it naturally follows that hundreds or thousands of people can make one system run better than just one.

But be sure to first research what policy the franchisor has in place for accepting new ideas and then, only after you've demonstrated that you can follow the system at hand, introduce your idea. Because, when it comes to innovation, not everyone sees it in the same light.

RELATED: Buying a Franchise vs. an Independent Business: What Are the Pros and Cons?

About the Author:

Sara Wilson is a freelance writer who specializes in issues related to small businesses. Contact her at wilson.sara@gmail.com.