Posted by Jess Saba on Fri, Aug 14, 2009 @ 06:51 PM
Concept Testing an Expandable Business
When I walked into Rickshaw Dumpling Bar in New York City for the first time I was convinced that I was walking into a franchise location. The simple red logo was printed on the napkins, the windows, the take out boxes and the cups. The interior design was simple and clean and the palette was mainly red, white and silver. The circulation optimized space for moving hungry business people in and out as fast as possible and the menu, displayed in simple print over the cash register was easy to read.
To my surprise, I discovered the only Rickshaw locations were the one I was standing in and a Dumpling Truck that travels the streets of NYC.
As I spent the next six weeks walking the streets of New York I noticed many other businesses which looked and felt like a franchise were actually single location restaurants primed for expansion.
It seems the model for franchising is changing.
In the past businesses decided to franchise after experiencing a certain level of success. After a working business model and reputation had been established, business owners would either look for additional locations to run themselves or to license their trade name to another owner.
Now, it seems that many businesses are developing the primary location as a way to test a concept for mass production.
Instead of starting as a "mom and pop" shop and expanding organically, the concept testing model does a few things differently from the start.
The business concept, the branding capabilities and the potential for customer loyalty are carefully planned for reproduction.
A Marketable Logo: An easily recognizable logo is produced by a professional graphic designer which allows customers to identify the brand as it expands.
The Flow and Feel: It is important to create a unique and comfortable layout which optimizes efficiency and accessibility. The design must be created with duplication in mind.
Interior Design: The potential to achieve economies of scale must be considered when choosing each aspect of the business including colors, fixtures, supplies and furniture.
What do you think of the idea of concept testing vs. natural expansion to franchising?