Customer Reviews

Franchising Dreams: The Lure of Entrepreneurship in America

5 star:		(4)
4 star:		(2)
3 star:		(1)
2 star:		(1)
1 star:		(0)

 

 

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)

... 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.

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.

I've read books on all the rules and technical issues of franchising and thought this would be a good book to give insight to the people in franchises. It does a good job at explaining what people thought franchising would be like and what it turned out to really be. It explains how franchisors and franchisees interact which I found to be suprising. Overall a very good book to read if you are interested in franchising.

First, let me say this is a book worth reading for anyone who may ever consider buying a franchise or becoming a franchisor of a business model or for anyone else who might have an interest in how franchising differs from other business arrangements. The author picked three fairly small franchise businesses for his study - a muffler shop, a cleaning business and a sign making business. By interviewing and observing the franchisors and a group of the franchisees he makes observations and draws conclusions about franchising overall and characteristics of the key players - those who sell and administer franchise business opportunities and those who buy and operate the franchise sites. I thought he did a pretty good job overall and his writing style was engaging.

Now for my criticism. This really wasn't much of a sample to work with to make a broad study and draw the kind of broad conclusions in the book. It would have been interesting to me and valuable to the study to have a lot more data - bigger enterprises like McDonald's and many restaurants, other industries and types of business, etc. Without more data, I'd analogize this study to a study of the stock market based on the performance of 3 small cap stocks. Interesting, but not really that much of a study of franchising overall.

Still, read this book if you have stars in your eyes about buying a franchise. You'll learn a lot - widely used and greatly overblown claims about success of franchises versus individually started businesses, wildly one sided franchise contracts, hard to deal with franchisors and franchisees, etc. You'll also learn how some have succeeded and see if you can project yourself into that scenario.

This book is not completely uninformative. The problem with it is that you could write the book in about 10 pages. The author fills in the other 170 pages with fluff. He goes into extensive dialog about things that don't have anything to do with franchising or that could have been summarized and saved a few pages. Of course, I don't think anyone would buy a 10 page book.

Another problem with this book is that he's an "outsider". He decided to do his thesis on this topic and that's all the book is. He goes around and talks to franchisees in three (and only three) franchises and gives you his findings in that book. So the book is full of observations with no answers. He can't tell you how to overcome the problems he's finding because he has no experience being a franchisee. For example, he makes the observation that social capital (networking with other franchisees) is critical to the success and prosperity. He takes about 12 pages to tell you this, but doesn't tell you one thing about how or in what way the successful franchisees networked with others. Did they just talk on the phone, did they set up a softball team, what?

Probably the most common type of franchises are restaurants, yet he does not visit a single restaurant franchise. And, as Brazos49 stated, three franchises is too small a section to draw any sound conclusions. This is even more true if you consider that he left out restaurant franchising.

I would recommend that you read Newchapter's review. You'll learn all you can from this book by reading that review and you'll save yourself 180 pages of really dry reading.

This book makes a great narrative compliment to some of the more factual books on franchising. You get to see a few real franchises from the eyes of both the franchisers and the franchise owners. The book was so intriquing I literally read it over the course of one 24 hour period. It gives you a real "feel" for the industry.

This book is a must read for anyone who is a franchisee or franchisor -- or contemplates entering into a such an arrangement. More than that, it's an enlightening and thought-provoking analysis of the underlying human and economic dynamics of franchising, a business structure most of us encounter daily.

Employing engaging dialog, probing questions and a crisp writing style, Peter Birkeland delves into the motivations and misconceptions of the "entrepreneurs" who respond to the attractions of owning one's own business -- only to find that the franchisor calls almost all the shots.

Mr. Birkeland has immersed himself in the world of franchising, giving us an inside perspective on what works, who succeeds, and why the vast majority who take the plunge of franchise ownership never achieve their expectations.

While even some of the better books on business seem to offer a few good insights and a whole lot of padding, Franchising Dreams is chock full of candid observations and astute assessments. It's pithy, and often profound. We'd love to see Mr. Birkeland follow up this book by focusing his same probing analysis on one of the big franchise organizations in the fast food industry.