Student: Franchising and Teaching Notes

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IM for Lovelock & Wirtz, Services Marketing 6/e

Teaching Notes for Cases - Section 5

45

CASE 6 AUSSIE POOCH MOBILE

OVERVIEW After creating a mobile service that washes dogs outside their owners’ homes, a young entrepreneur has successfully franchised the concept. Her firm now has more than 100 franchisees in many parts of Australia, as well as a few in other countries. In early 2002, she and her management team were debating how best to plan future expansion.

STUDY QUESTIONS How did Christine Taylor succeed in evolving the local dog-washing service she developed as a teenager into an international franchise business? ________________________________________________________________________ Note: All financial data are in Australian dollars (AUD), whose exchange value in 2003 at the time of the case was USD 0.57 = EUR 0.58 = GBP 0.41. [More recent exchange rates reflect a sharp drop in the value of the U.S. dollar against the Australian dollar, euro (EUR), and pound sterling (GBP). By late 2006, AUD 1.00 = USD 0.76 = EUR 0.60 = GBP 0.40). These changes in exchange rates would not affect decisions by APM on expansion within Australia but could have an impact on the relative attractiveness of future investments in, say, the UK versus the U.S.]

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© 2004, 2007 Christopher H. Lovelock

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Compare and contrast the tasks involved in recruiting new customers and recruiting new franchisees. From a franchisee’s perspective, what are the key benefits of belonging to the APM franchise in (a) the first year and (b) the third and subsequent years? In planning for future expansion, what strategy should Christine Taylor adopt for APM and why?

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Analysis
1. How did Christine Taylor succeed in evolving the local dog-washing service she developed as a teenager into an international franchise business?

Taylor’s success springs, first, from her strong customer service ethic, developed as a child from working in her parents’ bait and tackle shop. She may not have completed high school, but she is clearly intelligent, very focused, hard-working, and she has a strong motivation to succeed. She evolves her approach as business grows, modifying both the physical tools of the trade—the trailer— and deciding from research that expansion would be best achieved through franchising rather than through employment of salaried personnel. In other words, motivated franchisees “rent” APM’s business expertise and its trailers, leveraged by APM-controlled advertising, and seek to build business within exclusive territories. Expansion into other states has been achieved through appointment of franchise sales managers. Master franchisees also leverage the ability to expand in new locations.

IM for Lovelock & Wirtz, Services Marketing 6/e

Teaching Notes for Cases - Section 5

46

As Taylor soon discovered, there is a market for this service if delivered professionally and consistently by friendly, competent franchisees who relate well to both dogs and their owners. Expansion has been at a steady and manageable rate—Taylor seems to have avoided the trap of seeking excessively fast growth, which can lead to loss of control, poor-quality franchisees who fail, and sometimes cash-flow problems for the parent franchisor. She has maintained cohesiveness among franchisees in past through the creation of a Franchise Advisory Council (p. 528). She has also resisted the temptation to diversify into other fields, stating “Our niche is in the dog bathing business” (p. 521, col 2—also note quote immediately below): Taylor has benefited from the exposure of media stories and awards, which have helped gain recognition and credibility for both herself and the Aussie Pooch Mobile brand.

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Compare and contrast the tasks involved in recruiting new customers and recruiting new franchisees.

Customers
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Market potential is substantial in this category. Advertising by competitors can help build primary demand....
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