Back to School: A Lesson on International Franchising

I recently had the privilege of returning to The Ohio State University, my alma mater, to assist Kay Ainsley and Michael Seid in teaching a graduate-level class on franchising at Fisher College of Business. Michael is an adjunct professor at The Ohio State University and he and Kay are partners in MSA Worldwide, a franchise-focused consulting firm. For over 30 years MSA has guided emerging and established franchise systems. Michael and Kay have both served on the board of directors and various committees of the International Franchise Association (IFA) and are highly regarded as experts in the field of franchising.

Kay invited me to participate in her session, “Going International…Moving Intelligently Into International Markets,” based on our agency’s experience working with Duskin and several other franchise clients. She and I also share experience with Domino’s Pizza when she was director of International Development for Domino’s and we were the Agency of Record. My role was to provide color commentary on translating the brand standards to a new culture: What can change, what should be maintained? The short answer to that question is, you must do research to determine if your brand is relevant to the people and culture of the new country and adjust accordingly. I shared examples from our Duskin client in Japan and our Abrakadoodle client, which has a large presence in China. For Abrakadoodle, it meant changing their business model to include a permanent studio that is not standard domestically. For Duskin, it meant adapting the operating standards, reengineering the recipes and designing smaller footprint stores for their Mister Donuts brand. In both cases, the logos, proprietary systems and trade dress stayed fairly consistent, but a lot more changed.

Michael closed out the evening class with a discussion of Social Franchising, a fascinating business model which IFA has defined as “the application of commercial franchising methods and concepts to achieve socially beneficial ends.” Michael had been an active advocate and advisor for a number of initiatives including family clinics in Kenya and Rwanda and The Ohio State University’s Global Water Institute, which is bringing residential and agricultural water to rural villages in Tanzania and Kenya. He noted that franchising works because it is different from a top-down aid distribution model where aid can be diverted before reaching the people it is intended to help. Those models tend to grow the top of the distribution chain while franchise systems are small at the top with a large bottom. They provide support and incentives for small franchisees to do well and enable more end users/customers to benefit. The measurement of success is not how much aid is provided, but how many customers are well served to brand standards. Michael believes that “using franchising to scale social enterprises in health, education, water, sanitation, agriculture and clean energy will have a transformational impact on health, the environment and economies around the globe.” I believe that he is right and applaud his leadership in this space.