For franchise operations like McDonald’s, Supercuts and Ace Hardware, should the goal be to copy exactly or to adapt locally?
Transferring business success from one location to another has always been a tricky proposition. On the one hand, some experts advocate that companies try to copy the original operations as closely as possible. Consider Intel Corp., which uses precisely the same paint for the walls of all its chip plants in order to minimize manufacturing defects — just one example of the company’s motto, “copy exactly.” On the other hand, some contend that localization is crucial. To market a consumer product such as shampoo in India, for instance, Western companies should shrink their packaging to sell smaller unit quantities at cheaper prices.The issue of stringent replication versus local adaptation is especially important for franchise businesses. Indeed, diverse companies like McDonald’s, Supercuts, Ace Hardware and Super 8 Motels have succeeded (or failed) based on their ability to transfer a business template from one location to another. But how faithfully should that template be copied? Many managers contend that local adaptation of the template will increase an outlet’s chances of success.