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Chapter 2. The Franchise Relationship Mo... > The Customer: How Does Opportunity R...

The Customer: How Does Opportunity Recognition Work in Franchising?

Time and again, hopeful entrepreneurs announce, “I have a great idea for a franchise.” Unfortunately, there is no such thing as a great idea for a franchise. As discussed in Chapter 1, an idea is simply that: just an idea. Determining whether there is a great opportunity inherent in the idea is the crux of the entrepreneurial decision. Assessment of a concept starts with defining the opportunity and is validated in one or more outlets. The franchise relationship model provides a roadmap to apply the franchise context to the opportunity and to reassess the concept in the real-world marketplace to see whether it actually generates a profit. The customer is at the center of the FRM. The job of the franchisor is to develop a business format that will meet the needs of the customer in a way that makes money for both the franchisor and the franchisee. The SDS surrounds the customer in an attempt to meet the demands of the customer.

Franchisees and franchisors should assess and reassess often. The problems at Pizza Hut started when Domino’s exposed pizza delivery as a customer need that Pizza Hut wasn’t meeting. The Domino’s 30-minute guarantee (later changed, but by then the brand had been established) changed the rules about how people could eat pizza in the USA. Clearly, a segment of the population wanted a pizza delivery option.


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