Bread
Store Tells Franchisees
To Do Their
Own Thing, Really
By THOMAS PETZINGER JR.
The Wall Street Journal
November 21, 1997
"B
E LOOSE and have fun." That's
how the mission statement at Great Harvest Bread Co. of Dillon, Mont., begins
-- no surprise, perhaps, for a company founded by a couple who got through
college selling whole-wheat bread from a roadside stand in the early 1970s.
The real surprise is that Great Harvest's "be
loose" philosophy permeates a chain of 151 stores with $60 million in
annual revenue. Great Harvest is a franchise operation, but it hardly operates
like a franchise.
In this company, franchisees run their stores as they
see fit -- tinkering with recipes, setting their own prices, varying as much as
they choose from the basic model. No two locations are alike. The home office
conducts no store inspections.
As the cover
page of the Great Harvest franchising contract states in big, bold letters:
ANYTHING
not expressly prohibited by
the language of this agreement
IS ALLOWED
Why does Great
Harvest flout the cookie-cutter conventions of franchising? Partly
because of the personalities of its founders. But the company also finds
that freedom in franchising inspires ways of doing business that ultimately
benefit every member of the system.
"We are
a richly cross-linked community," says
Thus, a
franchise near
AS CORNELL
undergraduates 25 years ago, Pete and Laura Wakeman were ahead of their time in
the business of baking honey-wheat bread. We're talking 100% whole wheat, not
the diluted, stepped-on kind you buy in the grocery store. Their love affair
with wheat drove them out here to the middle of grain country, where they
opened a retail bakery. Soon they were milling their own flour, right in the
store. In 1978, someone asked for a franchise, and they've been selling them
ever since (currently for $24,000 each). But despite thousands of annual
inquiries, they sell only a handful each year. Why such slow growth?
Like all
good Woodstock-era alumni, the Wakemans hate the idea of telling anyone else to
do much of anything. Yet the Wakemans also harbor stubborn views about bread.
It has to be whole wheat -- made from flour ground fresh on the spot. It ought
to be sold hot. And customers should be offered a steaming slice -- free -- the
second they cross the threshold of any store.
Slow growth
permits the company to maintain these rigorous standards without resorting to
conventional controls, accomplishing with constant teaching and moral suasion
what other franchisers do with thick operating manuals and strict enforcement.
"We have a complete checklist," says Ms. Wakeman, "but we don't
put you out of business if you don't do it our way."
And although
it raises the risk a store may fail, the do-your-own-thing ethos generates a
priceless benefit: constant systemwide innovation.
Take Ed and
Lori Kerpius. Four years ago they quit their jobs -- his as a currency trader,
hers in retailing -- and opened a bakery in
THAT'S ONLY the
beginning. This year they picked up some new counter-service concepts in a
visit to the Northville,
"Yeah,
we're part of a franchise," says Mr. Kerpius. "But we're also growing
a business on our own."
One of my
favorite thinkers, Mark White, a business consultant in
In this
on-line era, academics struggle to discover the optimum rate of network
connectedness to foster innovation. Great Harvest has watched its optimum
naturally evolve. The stores that collaborate best seem to limit their regular
contacts to just three to five other stores, while maintaining a looser group
of roughly 10. "News travels very fast, yet the system doesn't bind
up," Mr. Wakeman says. "You don't need to know the person who has
your answer. You'll get all you need because they know someone who knows
someone who knows you."
The
extensive sharing and critiquing of concepts, including some of the company's
secret baking methods, exposes Great Harvest to the danger of leaks to
competitors. But that's OK, Mr. Wakeman says. "They'll be left holding a
blueprint of what Great Harvest was, and we'll be out of view."