JEC Project Profile: Mobil

How can third wave techniques be applied to first and second wave franchise networks?

Franchising takes many forms. Few think of Mobil Corporation as a franchisor, for example. But they are. And their more than 7,000 service stations in the USA (prior to their recent merger with Exxon) made them one of the larger franchise systems in total units.
     What began as a review of Mobil's plans to update their franchise dealer program became a multifaceted two-year engagement. Underlying all assignments was the charge to help them transition their culture toward a franchise-oriented paradigm that recognizes the importance of relationships.
Among the programs we developed was a pioneering set of quality management tools -- Mobil National Standards Handbooks; one for each of its service offerings. We also created Grow With Mobil -- Mobil's first multiunit selection process, a new system and structure for recruiting dealers from outside the industry -- and a variety of materials for communicating with franchised dealers. In addition, for Mobil's new On The Run convenience store franchise, we developed agreements, compliance systems, marketing methods and operations manuals.
     One of the most challenging components of the engagement was creating a viable way to market their On The Run franchise offering to their existing distributor/jobber channel. This channel, which operated more than half of all Mobil-branded retail outlets, was key to On The Run's market penetration. After extensive interviews with distributor/jobbers, we designed a new distribution channel. Built around high-performing "key" distributor/jobbers, this innovative system tapped the entrepreneurial energy and operational savvy of this key group, allowing Mobil to propagate the On The Run brand while, at the same time, abrogating the need for the costs associated with managing a new distribution segment. Further, it created a new source of revenues from franchise fees and royalty fees, which were split between Mobil and its new distributor/jobber "partners."
     Another innovative project was a propane marketing joint venture designed to transition a commodity product from wholesale into retail margins using third wave franchising principles. The pilot program was built on an alliance with an agressive distributor/jobber and employed a variety of franchising techniques, including conversion and spin-off franchising.