Start Up Venture: Franchise Business Model

Start Up Venture: Franchise Business Model

A venture capital group was funding a retail venture to open in the Washington DC area. The founders were knowledgeable in their field but did not have expertise in setting up a business framework. The goal was to develop a business model that could be franchised on a national level. They wanted to build their business strategically and “act like” a big business from the start.


The approach was to perform a comprehensive study of the opportunities the company had in their marketplace and develop a Vision that would capitalize on those opportunities. A “niche” market was defined and from there the future state of a nationally franchised retail operation was developed.


Since this was a new venture, a business operations model was developed from the ground up. Each discipline of the company including leadership, management, marketing, finance, operations, sales, talent, and facilities were studied in light of the national vision, the mission, and the

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brand. Systems were developed for each required function of the business. The unique areas that differentiated them including their buying process, their products, their customer service, and their store environment were documented and highlighted throughout the process. The organizational structure was reviewed – the need to protect their “buying process” identified the requirement for a full time buying consultant in New York City to provide constant product and trend information, leadership and consistency across purchasing as new stores were added. In addition a comprehensive corporate management and operations manual was developed as well as training programs to assimilate new staff quickly and efficiently into the culture of the business. The “customer experience” was defined and a facilities standard was set for developing the flagship store.


A VSE Leadership Dashboard was developed to manage the implementation of strategy and development of the business. Each area of the business had a detailed action plan with specific due dates and deliverables, which were monitored by

a joint team to insure issues were addressed and resolved, deadlines were met, and systems and processes were put in place as scheduled. The flagship store opened on time with full inventory 5 months from the date the project began.


The store was burglarized in its first week of business. The entire inventory was taken. Because of the buying processes set in place, new inventory was available to re-stock the store for its grand opening event scheduled 3 weeks after the opening. In addition, due to financial systems and processes in place – the company was able to identify specifically lost sales based on projections and business insurance compensated the store for lost sales for the full quarter of that year. They were able to begin the second quarter as if nothing had happened. Note: the facility did have a burglar alarm that was set – but it did not deter the robbers.

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