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16 of 16 people found the following review helpful:
3.0 out of 5 stars
Based on a PhD Dissertation, Negative on Franchise Industry, August 27, 2002
This book was originally a PhD dissertation that focuses on the franchise culture, and more specifically, "how conflicts are resolved and how the system is controlled." (pg. 10). Although the research was based on only three franchises, it makes many generalizations. Overall, it portrays franchising in a very negative light. Some points from the book: 1) Franchising has low barriers to entry, numerous competitors, low switching costs for customers, reliance on part-time and low paid employees, limited alternative suppliers 2) The franchising system creates uniformity among the outlets, which is good for the brand, but creates perfect substitutes among the franchisees. Little opportunity to differentiate. 3) Franchisors write the contracts and consequently it is slanted in their favor. 4) Good prospective franchisees: A students, people without speeding tickets, people with long careers with one company, people with good credit, women, people who are risk averse. 5) Many people enter franchising expecting a free ride, but it is just as demanding as starting your own business. All you get is a brand, and some best known methods. 6) "Operational factors are more critical than geographic factors." (pg 120) 7) "In the technical areas, in products, and in sales, franchisees had greater knowledge about the business than the franchisor." (pg 125) 8) Franchisees might think they are entrepreneurs, but they are not. As on franchisor said, "We need people who will follow our system." (pg 141)
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10 of 10 people found the following review helpful:
5.0 out of 5 stars
For Some, Franchising Nightmares, May 13, 2002
... I am one of countless Americans who are actively involved in franchising almost every day (if only as a consumer) and have become dependent on others to provide various goods and services. In most instances, the emphasis is on speed and convenience. Others do for me and my family either what we cannot do (e.g. dry clean clothes) or would prefer not to do (e.g. install and balance new tires). Almost all of the franchises with which we do business are privately-owned. Until I read Birkeland's book, I knew almost nothing about franchising except as a consumer. And frankly, I never thought about franchising. I simply assumed that all of those who work for various "quick" whatevers, for example, are employees of the same company. Not true. In the year 2000, in the U.S. alone, more than 2,000 companies in 75 industries will manage approximately 400,000 franchisees. "In turn, these franchisees collectively manage nearly 8 million workers, or approximately 1 out of every 16 employed persons in the U.S. economy." Hmmm. What impact has all this had on the so-called "Mom and Pop" (family-owned) business? According to Birkeland, the retail sales that flow through franchise companies is about $1 trillion or one-third of the entire (repeat, entire) U.S. gross domestic product. The corporate parents of most major chains (e.g. hotel and motel, fast food, and donuts) own few of the local businesses which bear their "brand" name. So, who owns most of them? Why do they own them? How does it work? What's involved? And also, have these local (or perhaps regional) owners made a shrewd investment? Birkeland answers these and countless other questions, most of which I hadn't even thought to ask. For me, this book was an eye-opener in many ways beyond educating me to the extent and impact of franchising within the national economy. I was also surprised to learn the "nuts and bolts" of franchising as an ever-increasing number of people pursue the American Dream which, in essence, combines both the excitement and the terror of entrepreneurship. Here in a single volume, Birkeland provides a wealth of information about franchise fundamentals, examines three chains (King Cleaners, Sign Masters, and Star Muffler), presents a "social profile" of franchisees, explains correlations between networks and alliances with survival, notes various franchisor "uncertainties, analyzes the nature and extent of control from various perspectives, and concludes with an Epilogue in which he observes, "The critical problem of controlling geographically dispersed workers is tractable for those franchisors who establish high levels of trust with franchisees. For those who cannot achieve that, the problem of control is a never-ending battle." Those who lose that battle experience what is, in various forms, the American Nightmare. I rate this book so highly for two reasons. (Were I thinking about becoming a franchisee, I would have a third reason.) First, I learned a great deal about a segment of society in which I continue to be actively involved as a consumer. The information and insights Birkeland provides enable me to appreciate how important that segment is to the national economy. Second, while reading his book, I also gained a better understanding of the sociological, indeed anthropological implications of that segment, just as I did when reading Eric Schlosser's Fast Food Nation and Barbara Ehrenreich's Nickel and Dimed: On (Not) Getting By in America. I highly recommend all three, especially to those who are now considering an investment in a fast food franchise.
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4 of 4 people found the following review helpful:
4.0 out of 5 stars
Franchising Dreams and The Rest of the Story, June 2, 2002
Franchising Dreams, The Lure of Entrepreneurship in America by Peter M. Birkeland does a great job identifying and analyzing the various obstacles of franchising. His book identifies these various obstacles both from the franchisee and franchisor perspective although with a strong hint of his consulting background and style. I do believe Mr. Birkeland could have added additional value if he had reviewed three distinctly different franchises other then mufflers, signing and industrial cleaning services. I believe he left out the largest impact in franchising, restaurants. As a franchisee I found his analysis of franchisee "versus" franchisor the most interesting and insightful but it seems to boil down to what makes anyone successful within todays business world, the ability to get along with people, persuasion and team work. I also believe if you only read Mr. Birkeland's book you will never purchase a franchise and the fact remains that as a franchise you are responsible for the bottom line running of the business. The most important decision in such a decision is doing your research and choosing the right franchise for the right reason.
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