Franchising Dreams: The Lure of Entrepreneurship in America [Paperback]

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)

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.