Breaking A Link In The Chain: Franchising Lessons From The Bourne Legacy

This is a second entry in what I hope will be a new series under my Franchising In The Movies blog category.  Hopefully, you won't view any of this literally because none of the analogies in this series will be perfect. I'm not here to argue plot points or to talk about the relative merits of the movies; those discussions belong on another blog (maybe I'll get around to creating that other blog one of these days). With that disclaimer, I do think there are some interesting comparisons between movies and real-life lessons in franchising. And because I love movies and I like reading and writing about movies, they make for a fun vehicle for a discussion about franchising.

The Bourne Legacy is the fourth film in the Bourne series.  This film, we're told, takes place around the same time as the second movie, The Bourne Supremacy.  In The Bourne Legacy, we are introduced to a new character (Aaron Cross) who, we are told, is somehow part of the same program that created Jason Bourne.  This program is operated by the shadowy government organization (aren't they always "shadowy" in spy thrillers?) Treadstone.  Bourne has "gone off the reservation" and is no longer under Treadstone's control.  Officials from other government agencies (I think they're in the CIA, or something) are worried that Treadstone and its operatives will be exposed due to Bourne's activities, which have apparently brought a great deal of media attention.

 

(Minor spoilers follow. Nothing I say isn't in the movie's previews, but if you haven't seen the movie or its previews, you might want to stop reading here. If you want to read on, click the link below).

Rather than risk exposure, public outcry, and attracting the ire of foreign nations, the government officials in charge decide that Treadstone and its operatives have become a political liability.  As a result, the order is given to "burn the program to the ground," which apparently means not only shredding and destroying the evidence that it ever existed, but also killing all of the strategically-placed operatives produced by Treadstone.  This "kill list" includes Aaron Cross, who is forced to run and hide from the government to stay alive. 

The success of Treadstone as a program relies entirely on its remaining secret.  If the program is exposed, the identities of the agents, what they can do and what they have done, will be at risk.  In essence, the value of Treadstone will be injured if its existence becomes public. 

Okay, so bear with me here: imagine that Treadstone is a franchise system and that its operatives are franchisees (and put aside any moral / legal judgments regarding who is the "hero" and "villain" — the comparison is to the factual scenario only).  Franchise systems, like Treadstone, can be envisioned (and are referred to as) chains because they are comprised of individual links.  Each link, standing by itself, does not create the value of the overall chain but instead it is the chain as a whole that is valuable.  But a chain will lose its strength when any individual link is broken.  In the Bourne example, Treadstone's chain also depends on the strength of each of its parts.  As a result, the "chain" must take precautions to protect itself in the event that a link breaks.  In an extreme event (like the one portrayed in The Bourne Legacy), sometimes a broken link can lead to destruction of the entire chain. 

Broken links do occur in franchising — in some systems more frequently than others.  Sometimes, a link breaks because an individual unit becomes insolvent.  Other times, a broken link can be caused by negative publicity (consider the story of the Subway owner who, after hours, allegedly turned his store into a strip club). In either case, the broken link can threaten greater harm to the overall chain / system if the franchisor doesn't act quickly and decisively.

In The Bourne Legacy, the broken links are dealt with through "termination" of the other links (executing the embedded agents and destroying the program files).  In essence, the overall chain is destroyed. 

In franchising, a prudent franchisor will use the tools available to it in its franchise agreement to deal with the broken link in order to protect the overall chain. In some cases, the franchisor will deal with a problem franchisee by terminating that franchisee's contract, severing the relationship with the franchisee to minimize negative system-wide consequences.  In other cases, a franchisor will use other means, like issuing default notices or penalizing the franchisee, to protect against systemwide harm.

 As a result, it's important for franchisors to ensure that they have strong franchise agreements that enable them to take quick remedial action if a franchisee's actions or performance threaten the chain as a whole.  The tools available to a franchise company under those circumstances can include everything from monetary or other penalties to terminating the contract. 

From a franchisee's perspective, it's just as important that those contractual tools exist for the franchisor.  This is because, from the franchisee's point of view, she or he doesn't want his or her own unit's operations to be threatened by another franchisee's actions.  If something harmful does occur at another unit, it's important that the franchisor be able to take quick and decisive action to prevent negative system-wide fallout.

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