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 The amazing story of the first franchisor

 

 Any business owner thinking of turning their business into a franchise system would do well to consider the story of one of the very first franchised businesses, says David Morobe, regional general manager at Business Partners Limited.

Besides being a gripping and inspiring story of a remarkable entrepreneur, it still holds many lessons for modern businesses that want to expand through franchising.

One of the first franchisors was Martha Harper, a Canadian who was born in 1857 into a life destined for miserable toil were it not for her amazing entrepreneurial spirit. At the age of seven she was sent away from home to work as a domestic servant, which she did for the next 22 years of her life. She had very little formal education.

She worked for a while as a domestic servant for a doctor, from whom she learned all she could about hair care, including how to make an organic shampoo which contrasted with the harsh soaps that were used in those days to wash hair.

Later she found a job in New York, still as a domestic servant, but impressed her employer’s circle of society ladies with her special shampoo and approach to hair care. Three years later, she felt confident enough to open a hair salon with her life savings of $360.

It is hard to explain what a radical step this was for her time. Apart from the fact that she was a woman who had the nerve to start a business, Martha essentially invented the modern women’s hair salon, complete with reclining shampoo chairs.

In those days in New York, women styled their hair at home. If they made use of hairdressers at all, the work was done by servants, or through home visits by professional hairdressers. Having your hair styled in public was unheard of.

Unsurprisingly, her greatest challenge then was to find customers. Her shop was situated next to a music school which did not have a waiting room, so Martha invited the waiting mothers into her salon where she coaxed them into trying her services.

Soon The Harper Method, as her salon was known, was the talk of the town. Martha thought carefully about how to expand her business, and decided to base it on the way her church was organised: a central headquarters that provided guidelines, training and support, and a network of semi-autonomous branches set up with local resources.

Martha was such a radical and brilliant business thinker that she pioneered social entrepreneurship at the same time. Because of her own experience, she decided to recruit her franchisees from the ranks of servants, and empower them with business knowledge and hair dressing skills based on her method. Each franchisee would buy the special reclining chair and hair washing sink from Martha, and if they did not have enough savings, she would allow them to pay it off.

In 1891, the first two Harper Method franchise outlets opened in Buffalo and Detroit and over the next few decades expanded to more than 500 salons at its height. Martha also started a training academy to teach her method and empower her franchisees.

What aspirant franchisors can learn from Martha Harper

The fact that the basic principles of franchising have remained the same since Martha Harper opened her first franchise outlet in 1891 points to the vitality and ingenuity of the concept, says Morobe. The franchisor gives the franchisee, often a novice, the method, knowledge and support to run a business under the franchise brand. The franchisees give the franchisor a distribution network for their products, and provide the capital to expand the network by buying their outlets and licenses to operate under the brand.

For Morobe, the most important lesson from The Harper Method is Martha’s emphasis on supporting the franchisee. One of the biggest mistakes that aspirant franchisors can make is to place the emphasis on the selling of franchise outlets, as if that is the aim and the end point of the franchising effort. In fact, the sale of the franchise outlet to the franchisee is only the start. Martha’s aim was to build a network of outlets so that she could increase the sales of her shampoo and services. The actual sale of the franchise, in the form of the chair and wash basin, was simply a step along the way.

Another lesson from the Harper Method story is that Martha treated her franchisees as complete novices. Although it stemmed from her empowerment mission, she laid down an important principle in franchising, which is to relentlessly train up each franchisee in the protocols, methods and even the values of the franchise group.

Even if a modern franchise does not have a primary empowerment mission, it is very important that each franchisee is immersed in the rules and the culture of the franchise group. It is the only way in which the franchisor can maintain the consistency of the service, and therefore the value of the brand, as the group expands.

Furthermore, Martha’s emphasis on empowerment introduced the principle of support and motivation for franchisees right from the start. Today, a modern franchise is still very unlikely to thrive if the franchisor neglects the motivation of its franchisees.

Martha may have recruited her franchisees from the ranks of servants, but that does not mean she did not take great care in selecting her franchisees. Her training academy had the dual function of not only educating her franchisees in the rules of the business, but also helped her to select the best franchisee candidates. Today, many of the top franchisors still apply Martha’s wisdom by having their own training academies.

Martha’s careful consideration of the position of her salons, especially that first one which she strategically placed next to the music school, holds another lesson for modern franchisors. The location of each franchise outlet cannot be left to chance or to the whim of the franchisee. The franchisor must use their knowledge and experience to approve the sites most likely to succeed.

Martha had tested her method for years on the society ladies whom she served before starting her first salon. And she ran her salon for a full three years before she considered franchising, thereby laying down another core principle of franchising - the concept must be tested and proven before it is franchised.
Morobe says Martha’s story also teaches the importance of having a sound strategy for rolling out a franchise group. Her first outlets were close enough for her to visit regularly, and she built her group of more than 500 franchise outlets over the course of more than 40 years.

Unplanned, rapid and random expansion of the network can quickly lead to the demise of a franchise.
Of course franchising has evolved significantly over the past century, especially when it comes to legal requirements and regulations that someone like Martha never had to worry about. Morobe strongly advises aspirant franchisors to hire technical experts to draw up the franchise agreement and disclosure documents.

He also urges prospective franchisors to make intensive use of modern information technology to enhance communication within the franchise group - something that Martha would no doubt have done if she could.

There is another way in which modern franchisors have it much easier. Today there are many experienced entrepreneurs who have been through the franchising mill and who are willing to act as mentors for new franchisors. Seek them out, tap into their advice, and look towards the pioneers who laid the foundations of good franchising.

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