Maintaining Strong Franchisor-Franchisee Lessons: Lessons learned from Apple’s “Gift”

In addition to unveiling the new iPhone and Apple Watch, Apple’s CEO, Tim Cook, also recently announced that the approximate 500 million iTunes users would also be receiving a free digital copy of U2’s latest album, Songs of Innocence. The album would be automatically downloaded and appear in each user’s iTunes library without the person having to do anything.

Analysts are estimating that this deal with U2 cost Apple approximately $100 million dollars. Apple likely calculated that the publicity and good will they expected to receive far exceeded this cost.

However, Apple’s marketing team did not anticipate the negative backlash sparked through social media and other outlets. Here is an article that refers to Apple’s approach as “invasive.”

Angry iTunes customers demanded to know how they could remove this U2 album that they did not ask for or want. Even fans who wanted the album complained about Apple downloading it onto their account without asking for their consent. In response, Apple had to develop a separate website which details the process for users to remove the U2 album from their library.

In addition to upsetting its customers, Apple also had to deal with unwanted media coverage criticizing Apple’s decision to download the music directly onto user’s iTunes library, rather than making the free download available for anyone who was interested, i.e., giving their customers a choice in the matter.

Apple’s misstep can serve as a lesson to franchise companies. Many franchise executives have the same thought process as Apple. They expect their franchisees to be thrilled by some new initiative that is going to increase their profitability, increase their sales, increase brand awareness, etc. What they do not take into account, is that franchisees, like Apple’s customers, want to feel they have a say in the process and that they are not being dictated to.

Successful franchise systems have strong franchisor-franchisee relationships. One of the quickest ways to weaken this relationship is to take steps where the franchisees feel that something is being force fed to them. A franchisor advising of a new initiative, without any input from its franchisees should expect results similar to what Apple received from their customers.