The pilot operation

Before launching a new franchised concept it is vital that a number of so-called "pilot operations" are established to ensure that they do comprise a viable business for both franchisor and franchisee. Although much will depend upon the individual market circumstances, these pilot operations should generally be for at least twelve months to establish their viability. Even if the franchisor has had corporate outlets up and running for many years, if they are not exactly the same as the proposed franchised outlets (for example, they have a different product mix, or are turning a concept that has historically been shop based into a mobile, van based environment) a pilot operation should be run to ensure that the new business is viable. After all, the franchisor is selling a proven business blue print to the franchisees. If it is not truly proven, what is the franchisor selling?

In practice, pilot operations have been found not only to prove the viability of the business but also to identify potential problems and provide solutions to them, in areas such as product/service type offered, marketing/promotional methods used, local and indeed national regulations, management systems, opening-hours, the market adequacy. Training and support, shops lay out and so on.

Once the concept has been proved by the pilots, it is essential that the franchisor continues running them. They provide both an excellent "barometer" of the franchisees' business and a useful "laboratory" where new product ranges, management and sales techniques and so on can be tested.