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Franchising is a viable business model to grow virtual business GIANTS in Second Life


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As I had some graphics designed for me by a friend today it suddenly occurred to me, the long forgotten idea of a franchise as a viable business model in Second Life.

What is a franchise? Think about McDonalds.
Disclaimer: I don't like fast food, unhealthy food or promotion of unhealthy life or habits on overall. I am mentioning McDonalds because its a symbol of a success of a franchise as a business model. 

There are many franchise chain restaurants who promote more healthy lifestyle and service more healthy food.

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From: https://franchisebusinessreview.com/post/franchise-business-model/

A franchise is a type of business that is operated by an individual(s) known as a franchisee using the trademark, branding and business model of a franchisor. In this business model, there is a legal and commercial relationship between the owner of the company (the franchisor) and the individual (the franchisee). In other words, the franchisee is licensed to use the franchisor’s trade name and operating systems.

In exchange for the rights to use the franchisor’s business model — to sell the product or service and be provided with training, support and operational instructions — the franchisee pays a franchisee fee (known as a royalty) to the franchisor. The franchisee must also sign a contract (franchise agreement) agreeing to operate in accordance with the terms specified in the contract.

A franchise essentially acts as an individual branch of the franchise company.

It is a very successful business model that I learned about and many years ago as a student when I traveled in US I was able to see it with my own eyes (Smoothie King, The CheeseCake Factory, SubWay and many others). In past I was going in direction of creating one in SL but then I totally forgot about it as I got busy with other things.

Some time ago I've watched  biographical drama film The Founder and through it I learned about complicated and even controversial history of McDonalds. It was very educational. If your aim is to grow big business some day I recommend you watch it.

I think that franchising could be a very successful model that could be used across different type of virtual services and products in within Second Life. I am not starting this post to promote my franchise (because I don't even have one) but to promote the franchise as a viable business model in Second Life for virtual content creators. It works in RL and I believe it can work well in Second Life. I wanted to become a virtual business coach and help other people find ways how to grow their virtual businesses. For same reason I recently floated the idea of a business incubator in Second Life.

There might already be successful established franchising models in Second Life and we don't know about it. The closest I think is affiliate marketing / virtual products brands in-world stores who share commission on sales. But I think those lost on prominence with introduction of SL Marketplace (but they still work).

Second Life is used for many different things. The aspect of Second Life that I focus on and which one I want to advance virtual businesses and the ability for people to be able to earn money in a virtual world. Basically I employ my mind both professionally and as a hobby to try to find more and more ways how to make as many people as possible to benefit from growth of Second Life economy. 

I would like to see Second Life to become something more than what global community currently sees it for. A place to escape into a surreal world and where you can forget about your RL. (Disclaimer: using SL to relax and escape from mundane life is perfectly ok and I don't have anything against it at all and it is actually currently the biggest reason why and what for Second Life is successful). I would want it to be that and so much more. That is why I am all for exploring other use cases of Second Life not of it just being a game or a role play place but also a place where one can work, learn, advance and earn money and conduct and grow business. I would like to see it being seen by global public audience as a world of many different opportunities.

Now most people don't have skills, talent or time to learn designing or 3D modeling to a level where they could create a marketable products. I believe that virtual businesses in Second Life could provide for employment of people with less skills in a way to provide for them a viable path towards gaining many new skills that can put them on a progression path in life and at the same time grow virtual businesses that can gain a significant importance. 

I have already gained so much from Second Life. I came to the point where I realized that to outside world Second Life is still relatively small and the only way forward is if we as a business community of SL find ways how to cooperate and create real business breakthrough that can lead towards greater and better recognition of Second Life to the outside world. But for that we need to start creating products, services and BRANDS that can go big - McDonalds big (that could break through & gain recognition in real world).

Basically someone within SL business community needs to create a killer product for SL that will create interest and waves of new sign ups to Second Life that will benefit all the other existing businesses in SL. They need to be able to make so much money so that they can afford to advertise on Facebook, Instagram and other social media and add to the efforts of LL marketing. We need to learn or work towards to provide environment to make such things possible. I would not like to see just 1 but a growth of as many as possible virtual business giants in within Second Life.

Franchise is a nice business model for creating new rules and standards for product or service that can then spread all over the grid. All the communities can take the business in a package and integrate them in within their lands for communities to use.

If I ever create any new products in Second Life I'll apply the model of a franchise.

I would like to lay it to the heart of everyone who means something in a virtual business community to maybe start marketing your products and brands in a way you can create opportunities for the SL users. If you want to set your SL business on a enhanced growth path then find ways to make it so that clients of your services and consumers of your products can also benefit from growth of your virtual business and brand. Many are already successful at it and just need to find ways or add their successful model on steroids.

So I present a franchise as a business model as something to look into and learn from it and maybe implement in your own business strategy.

 

Edited by Wili Clip
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Please, stop trying to turn Second Life into Real Life. No one really wants that to happen. If we wanted Real Life we wouldn't bother with Second Life!

Because that's the truth. This is complete nonsense, even if you add ability to energy and will. As a self proclaimed aspiring entrepreneur, the onus is 100% on YOU to make something in

I keep racking my brains here and just cannot see any upside to the creator, given that SL is a virtual world where one can TP anywhere instantly.

Posted Images

   Already been done in a fair few different ways, hardly a new concept.

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40 minutes ago, Wili Clip said:

it suddenly occurred to me, the long forgotten idea of a franchise as a viable business model in Second Life.

Have you never seen any of those franchise vendors that folks can put out?  They sell another person's creations, giving some of the money to the original creator and some to the person that puts out the vendor.

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Thats not going to work, because you lack a key ingredient that makes both franchises and non-franchise stores work: Physical distance. Max Mustermanns McDonalds restaurant in Hamburg works, because his customers in Hamburg can't buy their fries and burgers directly from the McDonalds headquarters in Chicago. If McDonalds was a business in SL, I would simply teleport to the "Chicago" sim and buy my fries and burgers directly there. No need to teleport to the "Hamburg" sim to buy fries and burgers from Max, who rented the sim and purchased a bunch of franchise equipment to set up a McDonalds restaurant there.

The little bit of franchisy stuff that worked in SL took a big hit, when the MP became popular.

Edited by Syo Emerald
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Why are some people trying to convince me about things that they are not going to work or that it has been tried and it didn't work or that it already exists and it doesn't work 😁

Anything and everything is possible if there is energy and will for it. \O.. O/

 

Rather than how something is not going to work. Tell me how to make something in a way that it works. 

\O.. O/

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Posted (edited)
26 minutes ago, Syo Emerald said:

...you lack a key ingredient that makes both franchises and non-franchise stores work: Physical distance. Max Mustermanns McDonalds restaurant in Hamburg works, because his customers in Hamburg can't buy their fries and burgers directly from the McDonalds headquarters in Chicago. If McDonalds was a business in SL, I would simply teleport to the "Chicago" sim and buy my fries and burgers directly there. No need to teleport to the "Hamburg" sim to buy fries and burgers from Max, who rented the sim and purchased a bunch of franchise equipment to set up a McDonalds restaurant there.

The little bit of franchisy stuff that worked in SL took a big hit, when the MP became popular.

Usually franchisees are not opening business in a desert because there is no people. Franchisees set up where there are people.

In Second Life the german SL users who usually visit Hamburg might not even know that Chicago exists or they don't go there because they speak different language and they want to spend time with people from the same country.

You are right there are no physical distances but you're forgetting about the cultural differences and differences in taste and their fav hangout places SL users have.

Edited by Wili Clip
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13 minutes ago, Wili Clip said:

Tell me how to make something in a way that it works.

Funny... you bring it up as the most brilliant idea of the 21st century.... but we have to prove you'r right? ehm.. thats not how it works

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Posted (edited)
1 hour ago, Silent Mistwalker said:

Please, stop trying to turn Second Life into Real Life. No one really wants that to happen. If we wanted Real Life we wouldn't bother with Second Life!

Well I am not trying to change anything for anyone. I am not even in position to change anything. I want to add and build new things and encourage people to do the same :) if they want.

If Second Life somehow became more than just a virtual utopia and gained on new use cases and started being used by more people for more different reasons this wouldn't really mean that you or anyone else who used Second Life for specific narrow purpose that they prefer would need to stop using it that way.

Take for example internet as a protocol. If some people use internet for accessing google search to find something that doesn't change the internet for you in case if you're just using it for email.

I view a virtual world as a tool - a protocol built on top of internet TCP/IP layer. There is a reason why no one can really define what Second Life is. Because it is different for different people as different people use it for different things. Same is with internet. 

It is a multi purpose tools. My main argument is that if you add more and more layers for different uses you are going to get more people from all over the world who will want to use Second Life in their own preferred way.

Second Life is multi-community, multi-cultural, multi-purpose online world the moment this would no longer be seen and supported by the company who owns it the magic of Second Life would disappear and it would start to decline.

Edited by Wili Clip
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14 minutes ago, Wili Clip said:

Usually franchisees are not opening business in a desert because there is no people. Franchisees set up where there are people.

Correct, but no place in SL is a desert in the same sense of the RL thing.

14 minutes ago, Wili Clip said:

In Second Life the german SL users who usually visit Hamburg might not even know that Chicago exists or they don't go there because they speak different language and they want to spend time with people from the same country.

They may not know about the Chicago sim, but they may know McDonalds. So they type in "McDonalds" into the search and the search gives them "McDonalds Mainstore" located on the Chicago sim. And off they go, teleporting there and purchasing stuff. Most of them will have enough english skills to get that done and if the McDonalds owner has doubts (because maybe the fries come with a really elaborate hud), he includes a notecard with translates instructions.

14 minutes ago, Wili Clip said:

or they don't go there because they speak different language and they want to spend time with people from the same country.

And we are still talking about a business that sells stuff, right? Because thats never going to be a place in SL where people hang out (most hangouts barely break even and are more or less some whales hobby or a community effort). Sure, some of them will prefer to seek out people from the same region/language and those places do exist, but I think you are overestimating this "bubble effect". The international community of Second Life is not just made up of the anglosphere and everyone else stuck in their tiny, national bubbles. We happily shop at Maitreya as it is. We wouldn't need "german Maitreya".

Edited by Syo Emerald
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30 minutes ago, Wili Clip said:

Why are some people trying to convince me about things that they are not going to work or that it has been tried and it didn't work or that it already exists and it doesn't work?

Because that's the truth.

30 minutes ago, Wili Clip said:

Anything and everything is possible if there is energy and will for it. \O.. O/

This is complete nonsense, even if you add ability to energy and will.

30 minutes ago, Wili Clip said:

Rather than how something is not going to work. Tell me how to make something in a way that it works.

As a self proclaimed aspiring entrepreneur, the onus is 100% on YOU to make something in a way that it works. To expect that from us is intellectually lazy begging, Wili.

ETA: Continually lost in all of your ramblings is the reality that the success or failure of any business in SL is entirely dependent on LL's ability to attract and keep customers. You can't consume more oxygen than the atmosphere provides.

Edited by Madelaine McMasters
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25 minutes ago, Wili Clip said:

In Second Life the german SL users who usually visit Hamburg might not even know that Chicago exists or they don't go there because they speak different language...

Quoted for outstanding stupidity.

The rest is just marketing blabla.

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19 minutes ago, Wili Clip said:

Second Life is multi-community, multi-cultural, multi-purpose online world the moment this would no longer be seen and supported by the company who owns it the magic of Second Life would disappear and it would start to decline.

 

The magic wore off for me more than 10 years ago yet I'm still around because SL does not mimic Real Life as closely as you want it to. People have been screaming that SL is declining for over 15 years. The sky still hasn't fallen. SL has been online for almost 20 years now. Active Worlds, the predecessor of SL, has been online for 25 years. Both SL and AW have changed hands in the past decade.

You aren't the first one to try to make SL exactly like RL and you won't be the last. Problem is, none of you will actually succeed because most people do not want SL to be just like RL.

Edited by Silent Mistwalker
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Posted (edited)

Sometimes public forums remind me of Plato's Allegory of the cave

800px-An_Illustration_of_The_Allegory_of

Everyone can see things in the way they want to see and believe in things they want to believe. It is fine. My purpose on this forum isn't to get in arguments with other people or to test anyone's semantic and logic abilities.

I started this topic for people who might have had an idea of creating something as a franchise in SL and they forgot about it (hehe and this way I also won't forget about it as it will stay on my mind because its been discussed). And for those who haven't yet considered business model of a franchise and for those who don't know yet about it and might learn something about it.

There are so many products and services that have not yet been invented in Second Life. For some of new products and services franchise model might work the best. It can not work for all virtual businesses as they are all very differently set up.

 

Edited by Wili Clip
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1 hour ago, Wili Clip said:

Now most people don't have skills, talent or time to learn designing or 3D modeling to a level where they could create a marketable products. I believe that virtual businesses in Second Life could provide for employment of people with less skills in a way to provide for them a viable path towards gaining many new skills that can put them on a progression path in life and at the same time grow virtual businesses that can gain a significant importance. 

This does exist in SL though, it's called full perm items.  There are gads of creators who sell their own re-worked or re-textured full perm items.  Many people think most creators in SL are all original mesh but even some of the most popular creators in SL use full perm items sold here in SL.  There is one with very pretty pink items and she is a very good texture artist but one can buy those full perm items themselves.  Not all of whom are considered the most popular creators in SL are using original mesh items.   

Edited by JanuarySwan
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Tbh, I think the replies have been a little unkind. I don't think that what the OP is proposing has has been tried in SL before. An example of what the OP is suggesting is that small Maitreya (is that how it's spelt?) shops open up, where the customers can't tell the difference between the real Maitreya and the  franchises. Or where a creator makes things and small shops open up with the cretaor's brand name to sell them (not just terminals where stuff can be bought). I don't think that kind of franchise has been done in SL, and I think that's what the OP has in mind.

There are a number of reasons why I don't think it would work in SL, but I'm not going to write it off out of hand.

P.S. SL is a LOT like RL, and that's what people want or it wouldn't be like it. There is nothing wrong with considering using another RL business method in SL.

Edited by Phil Deakins
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Posted (edited)
11 minutes ago, JanuarySwan said:

This does exist in SL though, it's called full perm items.  There are gads of creators who sell their own re-worked or re-textured full perm items.  Many people think most creators in SL are all original mesh but even some of the most popular creators in SL use full perm items sold here in SL.  There is one with very pretty pink items and she is a very good texture artist but one can buy those full perm items themselves.  Not all of whom are considered the most popular creators in SL are using original mesh items.   

I'd be interested to provide free space to sell their full permission products at my sim. I want to support the creators of full permission items and also open source scripts. I already started building an open source scripts library in-world and writing scripts in a way so that those people who don't know yet how to program can easily use them - its commented and explained step by step.

I haven't invited other scripters to help me yet. My model is such that the scripters create the basic open source scripts that everyone can get for free and then they create another one that they can sell for few L$ with step by step explanation how to use it and with added functionality (this way scripters who produce open source are rewarded a bit for their time and effort to build a script library).

Edited by Wili Clip
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3 minutes ago, Phil Deakins said:

is that small Maitreya (is that how it's spelt?) shops open up

I doubt Maitreya would want that though because she sells more than bodies as she sells clothing, shoes, accessories.  Not to mention the advertising would be confusing in search and the cost for land ridiculous for a franchise of someone else's stuff like a middle person.

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2 minutes ago, JanuarySwan said:

I doubt Maitreya would want that though because she sells more than bodies as she sells clothing, shoes, accessories.  Not to mention the advertising would be confusing in search and the cost for land ridiculous for a franchise of someone else's stuff like a middle person.

No doubt, but it was just a name that came to mind for an example :)

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3 minutes ago, Wili Clip said:

I'd be interested to provide free space to sell their full permission products at my sim. I want to support the creators of full permission items

I suppose you could contact some of the full perm creators that are currently selling in the MP - a quick check of their products would let you know if they already have an inworld store or not. 

There are currently  396,215 full perm items on the MP spanning the following Categories and Price Ranges:

image.thumb.png.52049ad70bed73577072524cdbc8a9fc.png

 

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Still sounds pretty much the same as affiliate vendors.  I never shopped from them before and I don't think I'd shop from a franchise when I could just as easily TP to the actual store.  

I also agree with @JanuarySwan.  Most creators would probably prefer their own store come up in search first rather than some franchise.  Those other places may have more traffic because a bunch of bots/fisher persons are idling around.

 

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I have a plan to create a franchise. I have an idea about how to. Its going to be lots of work. If gods give me strength I'll make it. Best way to see if something can work is to actually do it and see if it works. Another reason why I posted about franchise model on public forum is probably to keep myself motivated.

Lots of people saying about something that its not going to work actually gives me energy to through work prove them wrong. \O.. O/

My motivation works in mysterious way 😁

 

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11 minutes ago, Phil Deakins said:

An example of what the OP is suggesting is that small Maitreya (is that how it's spelt?) shops open up, where the customers can't tell the difference between the real Maitreya and the  franchises.

Where's the need, though? Why shouldn't I simply go to the original store and get the goods from the original artist?

Instead, I might risk falling for a fraud...

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1 minute ago, Phil Deakins said:

No doubt, but it was just an example, and that name came to mind :)

Many of the mesh model head makers have signs up in their mesh head stores for Maitreya and Legacy but this is the creator's co-mingling to advertise more rather than franchising on each other's sims from what little I know about it, which is not much because I don't even know if there are landmarks or one can purchase a body on any mesh head maker's sim or not.  

But, to franchise other's stuff, LittleMeJewel posted above that is already possible but it's becoming a vendor of someone else's stuff for a cut.  That's almost always been here.

8 minutes ago, Wili Clip said:

I'd be interested to provide free space to sell their full permission products at my sim. I want to support the creators of full permission items and also open source scripts. I already started building an open source scripts library in-world and writing scripts in a way so that those people who don't know yet how to program can easily use them - its commented and explained step by step.

I haven't invited other scripters to help me yet.

 Free space to full perm dealers and open source scripts...well, you could become a building school.  Some scripts are available for free at certain building schools or one can ask a teacher what script they need.  There is also an inworld group called SCRIPTS for anyone who needs help.   But, why would you want to open your sim for free to full perm products only?  I'm just wondering?  If you have any low cost stores available for non full perm products, let me know.  

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