Most people understand the word “franchise” as meaning a business with an established model that is “rented” out to others (franchisees) for a fee and/or royalty. While this definition is correct, it is only the external representation of the word, franchise, which also means a relationship of loyalty based on trust. In the case of restaurant franchises for example, the customer can “trust” that each and every outlet will have a very similar value proposition and quality expectation.

The word, franchise, is used more broadly in business to denote any relationship of trust-based loyalty, e.g., a good business leader can have a strong franchise with his employees.

How does one build a franchise? Business leaders tend to see the world in macro terms, i.e., the 30,000 foot view. Hire great employees, engage them to the company’s Mission, and empower them to satisfy the customer. Blah, blah, blah. In my experience, a franchise is built one contact at a time, and frequently at the most basic levels of any company, more specifically with every employee who comes in contact with a customer. Case in point:

The area where we live is ringed by a number of upscale grocery chains, all the giants of the industry actually, and each with a “flagship” store representing their latest thinking in merchandising. It’s a pretty competitive environment, as I can go to any of these stores within a five minute car-ride. I tend to frequent our local Metro-Plus store (the Plus designation signalling a more upscale value proposition). It’s the closest of all the stores and is in the shopping centre with my bank, pharmacy, and gym; so pretty convenient (I’ve been to the gym 5 times in the last 10 months, so that’s sure not what’s driving the choice).

It’s a nice store, although a little dated in design and lighting. Nevertheless, their produce is pretty good, they have an excellent fish counter, and the butcher shop is also very good. I never buy ground beef. My strategy (when not buying organic) is to find what’s on sale, e.g., a blade roast, buy a big piece and ask the butcher to grind it for me. The Metro has been doing this, although somewhat grudgingly; they don’t say anything but give me a kind of pained look every time I ask. The last time, the butcher sent out his assistant to tell me that he couldn’t keep doing this because since the meat was on sale, the extra time he spent grinding it (2-3 minutes) would undercut his profit margin. No kidding. I’m not telling tall tales here.

Yesterday, I was at the meat counter of the new Provigo flagship store in Kirkland. A beautiful store, designed around the “market” concept where each department looks like a small independent boutique. I asked the butcher if he would grind up a blade roast which was on sale for $4.99 a pound. He said, “Sure, no problem”, but then suggested I buy the Extra-lean ground beef on sale this week for $2.99 a pound. I told him I never buy pre-ground beef. He looked at me and said, “How about this: I’ve just finished trimming a bunch of filet mignons and was planning to add the trimmings to the rest of our beef cutting before making hamburger. What if I grind you up a couple of kilos of filet mignon at the same price as the Extra-lean ground beef?”. I quickly agreed and watched him do this in front of me. He even showed me the filet pieces as he was putting them in the grinder. I walked away with 2 kilos of ground steak for the price of burger!

That’s how you build a franchise. The problem is that the butcher at Metro and his staff, think that their job is to cut meat. The butcher at Provigo has realized that his job is to proactively delight the customer!