A controversial last-minute cutting of The Apprentice panel suggests Lord Sugar may need a brush up on his franchise knowledge!
Having been invited onto The Apprentice as a panellist in the final episode, Carl Reader, a franchise industry specialist from Dennis & Turnbull Accountants, was excited to see the open attitude towards franchising - often, business shows such as this and Dragons Den tend to be dismissive of franchising as a concept. The panel opportunity was cancelled at the last minute due to a change of heart of the finalist Joseph Valente, which unbeknown to us was undoubtedly swayed by Lord Sugar's opinion on both his and Charleine Wain's business model.
Carl explains: “Interestingly, the talk between myself and my franchising colleagues at the final presentations, filmed several months ago, was that Valente's business would have suited franchising perfectly, with some tweaks to the model and a robust launch plan. At the time we were unaware of Lord Sugar's attitude towards franchising, and in fact believed that not choosing franchising could have jeopardised his chances of success - certainly, during the live presentations, the proposed investment of £250,000 in property didn't seem to be entrepreneurial, and at the time it appeared to be a rash judgement by the contestant - subsequently edited out of the final footage.
“One of the comments in the TV show that was very true from Lord Sugar was in respect of Charleine's USP. He stated that she couldn't simply open a salon in London, shout ‘Charleine's here!’ and be successful. This would hold true in both franchised and non franchised hairdressers - it's a very competitive business, and the successful ones are those which have a strong USP. What's more, when franchising it is possible to franchise the brand, the systems and the culture of the business; but you cannot franchise Charleine - there has to be more to the offering to make it attractive to both potential franchisees and the end customer.
“The real surprising comment from Sugar however was the assertion that franchising is only for big business. Perhaps unsurprisingly, given my upcoming book on this very subject (The Franchising Handbook), this is the polar opposite to what I've seen in my years in franchising! In fact, I'd go so far to say that business format franchising is one way that small businesses can scale rapidly and compete with the 'big boys'. Most know that McDonald's started as an independent diner, and grew through Ray Kroc's vision of franchising - the fact that Lord Sugar has forgotten is that, given he was considering a hairdressing and a plumbing franchise; both Dyno and Toni & Guy were once small entrepreneurial businesses - and both achieved tremendous success through franchising.
“In fact, Toni Mascolo has been quoted regarding his educational visits to America to understand franchising and how it could be applied to his business; and both Dyno and Toni & Guy are proud to embrace their pioneering use of franchising on their websites.
“Sugar also mentioned during the interview after the final that you can only franchise a ‘renowned, successful business’. He is absolutely correct that you can only ethically franchise a successful business - but hopefully the above helps confirm that a potential path to becoming renowned is in fact franchising!
“Perhaps, given that Lord Sugar has never operated under a franchise model, this is outside of his comfort zone - I'm sure that there would be many who'd be happy to see him build and grow a successful franchise to add to his business empire!”