Even if franchising only arises in specific demand circumstances, it suggests that it is possible to replicate a business more-or-less, and that there are other reasons why it isn’t done more often. And for some kind of evolution, you don’t really need a peer to peer spreading franchise—if the parent organization creates new offshoots more like the ones that went better last time, you would have the same effect, and I bet they do.
Also, I don’t think replication is required in the Good argument—merely being able to create a new entity which is more effective than you.
Even if franchising only arises in specific demand circumstances, it suggests that it is possible to replicate a business more-or-less
No, it suggests it’s possible to replicate a few particular businesses with sufficient success. (If the franchisee fails, that’s not a big problem for the franchiser.) The examples I know of are all fairly simple businesses like fast food. Their exceptionality in this respect means they are the exception which proves the rule.
No, it suggests it’s possible to replicate a few particular businesses with sufficient success
All startups (by Paul Graham’s definition) rely on massively replicating a successful business element, for example.
The boundaries of a firm are, in certain ways, arbitrary. A firm can “replicate” by selling franchises, but it can also replicate by opening new offices, new factories, etc.
Some examples: the big four accounting firms, test prep, offshore drilling, cell service infrastructure...
Even if franchising only arises in specific demand circumstances, it suggests that it is possible to replicate a business more-or-less, and that there are other reasons why it isn’t done more often. And for some kind of evolution, you don’t really need a peer to peer spreading franchise—if the parent organization creates new offshoots more like the ones that went better last time, you would have the same effect, and I bet they do.
Also, I don’t think replication is required in the Good argument—merely being able to create a new entity which is more effective than you.
No, it suggests it’s possible to replicate a few particular businesses with sufficient success. (If the franchisee fails, that’s not a big problem for the franchiser.) The examples I know of are all fairly simple businesses like fast food. Their exceptionality in this respect means they are the exception which proves the rule.
All startups (by Paul Graham’s definition) rely on massively replicating a successful business element, for example.
The boundaries of a firm are, in certain ways, arbitrary. A firm can “replicate” by selling franchises, but it can also replicate by opening new offices, new factories, etc.
Some examples: the big four accounting firms, test prep, offshore drilling, cell service infrastructure...