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The Burger King thing and when it’s not your idea

A franchise, I think, is both big business and small business.  I’ll explain myself in a moment.  According to InvestorWords.com, a franchise is:

  • …A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a continuing contractual relationship with other businesses (franchisees) operating under the franchisor’s trade name and usually with the franchisor’s guidance, in exchange for a fee ….”

[picapp src=”d/a/2/4/Burger_King_Opens_6099.jpg?adImageId=7533708&imageId=4987767″ width=”234″ height=”148″ /]From the corporation’s point of view, its entire network of franchise locations equates to its big business profile.  From the point of view of an individual franchise holder at a specific location, this is that individual’s small business venture.  So, you could argue that a Burger King franchise is both big and small business.

I was prompted to think more about last week’s business news about the fact that a large percentage of franchise holders for Burger King are going to/thinking about suing Burger King corporate for the  $1 double cheeseburger promotion .  You kind of get the feeling that the marketing folks at corporate thought ‘wow, what a good idea,’ while the individual franchise holders thought ‘hey, nobody asked me!’

I mention this because of what the checkout clerk at my grocery store said in conversation yesterday as I was paying for my groceries.  I’ve been shopping at this store for the past six years so the checkers and I are familiar enough to chitchat as she scans and I bag…seems young people don’t want to get grocery bagger jobs anymore and more often than not I’m bagging my own groceries…I’m not complaining, just pointing it out.

Anyway, the checker mentioned that she had taken her sons with her this past Saturday to one of the Burger King locations in our area-we have two.  Talk about a new fan and potential new customer for this company!  She said she doesn’t usually go to this franchise, but because of the special deal, she thought she’d try it.  And she was pleased!  In her words, [I don’t have a photographic memory, but this is very close]: “This was one of the best cheeseburgers I’ve ever had.” She appreciated the fact of the value and quality versus price.

I’ve written before about what customers want: quality, value and a reason to return.  This unusual promotion by Burger King met, for this customer, these three key things:

  • in her estimation, the double cheeseburger was of high quality
  • and, not only was the quality high, it was an incredible value – she received far more for her money than what she initially expected
  • Burger King gained a new customer, at least in the short run, because she said she plans to return, that she didn’t realize how good the burgers were

So, this promotion, while not popular with the franchise holders, was successful in the mind of one customer.

What I find interesting is that this fast food eatery would use the loss leader of one of its quality menu items.  Grocery stores use this marketing method all the time, but they have thousands of items in the store…a fast food place has few items in comparison.  I love that term loss leader, as it is so descriptive.  It is a consumer item that is sold at a loss with the hopes of leading in new customers/retaining current customers.  But I don’t know of very many small or home-based businesses that can financially afford to use this marketing technique.

It’s kind of fun when the world of business, news headlines and real life all come together at the check-out line at the grocery store.



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