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Effecting Change in Franchise Networks

By David J. Kaufmann

A constant source of tension between mature franchisors and their franchisees is the periodic need to modify the network's concept and system to keep up with (or ahead of) the competition; to incorporate new technologies; to respond to changed consumer demographics, ethnicities, preferences and trends; to introduce new products or services and delete from the system older products and services; to modify existing trademarks/service marks, or abandon them altogether in favor of new trademarks/service marks; to modify the exterior and interior design of the network's units and the equipment utilized on the premises; to establish new advertising platforms and campaigns; to require integration of new technologies; and, otherwise to keep the mature franchise network's image, products and/or services fresh, competitive and responsive.

Sometimes, modifying a mature franchisor's concept and system requires franchisees to make only slight changes. Other times, substantial unit renovations, franchisee retraining and new product/service offerings are involved. In other instances, a complete system overhaul is involved, requiring franchisees to retrofit their units completely to the new concept, operate under new trademarks/service marks and deal with entirely new product/service lines in lieu of existing product/service lines.

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