Turn Away from Turnkey

In an interview with the Wall Street Journal, David M. Overton, founder of Cheesecake Factory, Inc., was asked if he’d considered franchising. He answered that the business is too complicated for that. To start, there are over 200 items on the menu, and updates to the offerings are made frequently. He pointed out that, although many of the company procedures are standardized, there are no Cheesecake Factory clones around.
     A business format which has every element standardized is referred to as “turnkey.” The implication is that the owner or operator can succeed without the need for additional creative work. You turn the key and the money flows.
     Turnkey is key in the sense of keeping it simple for customers. Still, turn away from overly simplistic turnkey retailing.
     We might think of a franchise retailing model, such as McDonald’s, as turnkey. The procedures are standardized for the owner. But the worldwide success of McDonald’s happens when each franchisee moves beyond the cookie cutter to become distinctive. Earlier this year, McDonald’s received recognition from international advertising agency Euro RSCG Worldwide for ease in food selection because of customizing for the locale. In India, McDonald’s offers the Maharaja Mac, made with lamb. In Japan, there are shrimp burgers.
     It’s true this can lead to the customer needing to think a bit harder. One reader comment left on the WSJ posting about The Cheesecake Factory is, “I thought they only sold cheesecake.” Then once you wrap your brain around that, and before you wrap your chops around the creamy delicacy, you’ll be presented with a menu listing all those items.
     As for the franchisees, the tale is told of a visitor to a crowded McDonald’s restaurant in New York City who, when he finally makes it to the counter, orders two glasses of red wine. The young man behind the counter, a well-traveled individual, replies, “In both the content of your request and your manner of speaking, I sense that you are visiting us from France and this is your very first visit to a McDonald’s in America. I am aware that wine is often available at McDonald’s restaurants in your home country. But that is not how we operate here in the U.S.”
     With a puzzled look on his face, the Frenchman gazes around at the lines of customers. “You mean,” he asks the counter clerk, “people come here for the food?”

Click below for more:
Simplify for the Shopper
Bet on Consumers Wanting Turnkey Experiences