June 20, 2024 Copyright ©️ 2024 by JinRui International Patent & Trademark Joint Office
Not long ago, a castella cake shop owner came to our office and asked me, “How do I build a chain business?”
I asked him, “Why do you want to start a franchise?”
He replied, “I have great confidence in my product. Once people try it, they’ll come back.”
Then I asked, “What do you plan to make money from?”
He said, “I want to earn money by selling raw materials to franchisees. But since ingredients need to be whipped and delivered, I’m thinking of promoting it first in the Greater Taipei area.”
So I asked, “How do you plan to promote it?”
He replied, “That’s why I came to consult—how should I go about doing this…”
1. There Are Three Models of Trading Time for Money
One unit of time for one unit of money: like working a job or doing part-time work—earning through exchange.
One unit of time for multiple units of money: like writing a book or giving a lecture—replicating knowledge for profit.
Spending money to buy others’ time to make money: like starting a business, opening a store, or being a boss—creating value through people.
Franchising is a timeless business model that skillfully combines these three modes: exchange, replication, and creation.
2. Exchange
In a single store, customers come back because the food tastes good—that’s a form of exchange.
But the kind of exchange a franchise headquarters makes is different: it’s about franchisees believing you can help them make money, so they are willing to buy into that hope and exchange it for the opportunity to become a franchisee.
So the boss of the franchise HQ must understand how to exchange hope.
3. Replication
In a single store, when ingredient control is well-managed, customers feel the quality is stable and the food tastes good.
But franchise stores, constrained by delivery within Greater Taipei, face both high logistics costs and potential quality issues due to weather.
If “tastiness” is made the primary replication goal, it’s easy to go astray.
So the franchise headquarters’ owner must focus on replicating stable quality.
4. Creation
and experience, may not necessarily understand how to make management judgments. Do you know how to create value and have others carry it out? For example, how do you judge if someone is proactive? Design a table to teach franchisees how to evaluate. For example:
On the first day, teach them how to wipe tables — if they are taught and can do it, 5 points; taught but can’t do it, 3 points; taught but with a bad attitude, 1 point.
On the second day, observe whether they take initiative to wipe tables — does it on their own, 5 points; does it only after being told, 3 points; doesn’t do it even after being told, 1 point…
There is a simple evaluation sheet to check off each day. After 7 days of observation,
a score above 65 is passing; below 65, reconsider…
So, looking back at the castella cake shop owner, I gave him three suggestions:
1. Star-like founder: proactively share what you’re doing. The founder’s IP is the most effective way to become recognized by the public.
2. Unique technique: proactively share what’s impressive. Because castella batter is whipped, it has to be thrown out every two hours. This prevents standardized premix products — this is the spirit of a true craftsman.
3. Strong marketing management: there are two kinds of customers to deal with — those who buy the castella cake, and those who are prospective franchisees. You need to manage how they recognize, trust, and buy… this can be managed.
So, a real franchise boss must understand how to control the control points to earn intangible profit.
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This article is authorized by “Franchise Adversity Consultant Lü Bing-Hong.”
