Franchisor Mandates For Renovation: Do They Help Franchisees Go Strong or Go Wrong?
By Nitin Shah Chairman & CEO, Embassy National Bank | April 28, 2013
Needs versus wants. Must-have versus nice-to-have. Necessity versus luxury.
It's one of the most basic concepts of human psychology -- the idea that life is meant to be lived, not just survived. That's why we all have the urge to splurge, whether we're ordering at a restaurant, planning a vacation, or buying a new house, new car, or new clothes.
However, "needs versus wants" is also a basic concept of economics because bells and whistles come at a price. If the extras don't fit realistically into your budget, you may live large for a while but you won't survive in the long run. While everyone likes luxury, not everyone can afford it -- or perhaps some people can only afford it some of the time.
This battle between "must-have versus nice-to-have" is currently being waged in the hospitality industry as many franchisors issue mandates to renovate properties, while owners struggle with how to pay for the upgrades.
Let's look more closely at this debate between franchisors and franchisees -- and let's consider some potential solutions.