Chapter 9Understanding Where Franchisors Are in Their Lifecycle and Learning Curve
Regardless of the service, product, investment level, or industry, all franchise brands seem to track along a common brand growth curve, with predictable stages that need to be successfully navigated in a predictable fashion to maximize opportunity.
The FPG Franchise Brand Growth Curve
The FPG Franchise Brand Growth Curve stages are linear, sequential, time limited, and highly predictable if you know where to look.
The growth curve somewhat mirrors economist Raymond Vernon’s famed product lifecycle. Vernon discovered that, while the opportunity time frame and sales volumes aren’t consistent from product to product, the relative path is identical. See the following image.
Raymond Vernon’s product lifecycle graph.
The key to managing a product lifecycle is to correctly identify where the product is in the lifecycle and then employ human and financial capital relative to the needs of that particular stage.
For instance, during the introduction stage of Vernon’s product lifecycle, a company needs to focus on marketing to build brand awareness, engage customer trials, grow a customer base, and gather market share. During growth, a company runs hard, seeking to establish a dominant position and maximizing the opportunity by outpacing the competition. During maturity, sales soften, companies defend ...
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