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Lessons for franchises from Late Night


Mark Siebert

Illustration by Jonathan Hankin

For three decades, Johnny Carson reigned as the King of Late Night on NBC’s “The Tonight Show.” During the Carson years, CBS and ABC made attempts to compete with NBC’s star-studded program with shows like “The Merv Griffin Show” (1969–1972) and “The Pat Sajak Show” (1989–1990). But, the efforts were futile until NBC actually introduced the individual who would challenge the network’s position at the top.

David Letterman made his late night debut February 1, 1982, on NBC with his show “Late Night with David Letterman,” immediately following “The Tonight Show” starring Johnny Carson. Before moving to CBS, Letterman hosted the late-night hour following Carson for about 10 years

It was the first time American audiences saw Letterman’s edgy, unpredictable and sometimes zany form of comedy, and for many young audiences, it was a refreshing change from Carson’s more calculated character.

When Carson announced his retirement in 1992, fans of “The Tonight Show” were shocked to learn Letterman would not succeed the 30-year host and instead the job would be handed over to newcomer Jay Leno. So, Letterman took his talents elsewhere, and thus began the battle of late night. Despite CBS’s non-existent presence in late night during the Carson years, Letterman’s arrival shot the company to the top of the ratings board after the “Late Show with David Letterman” premiered on the network on August 30, 1994.

You may be asking yourself, what does this have to do with my franchise program? Well, the franchise space is an incredibly competitive market, not unlike network television, but you have the opportunity to defy the odds and create a successful franchise system among the hundreds of heavy hitters that already exist in the market.

Stand your ground

Most potential new franchisors that I meet have two things—a successful business model and the motivation to take it further. What they don’t have is a plan to move forward or the knowledge they need to compete effectively in the franchise market.

Like CBS’ late night slot, most emerging franchisors are competing for the attention of a limited and very specific audience. And, in most cases, they are competing against bigger concepts with greater brand awareness and bigger budgets. But, when these young franchisors can find their niche and learn how to best leverage it, the fight becomes a little less daunting.

First, don’t be afraid to be honest about your brand. For example, instead of trying to hide your company’s size as a smaller-scale franchisor, leverage your relative size as a positive. You are nimbler. You are faster. They will have a seat at the table. And the best territories are all still available. Be what you are, not what your competitor is.

Avis embraced this strategy with its famous ad campaign “When you’re only No. 2, you try harder. Or else,” as it habitually fell behind industry leader Hertz for nearly two decades.

The “We Try Harder” campaign, which launched in 1963, took Avis from losing $3.2 million to earning $1.2 million within the year. Embracing your shortcomings and being yourself in this competitive landscape is one of the fastest ways to stand out.

Hit your mark

In show business, timing is everything. Nailing the perfect punch line, pulling a fast one on a guest, laughing at yourself when necessary—these are all important elements to put on a great show. Likewise, knowing when to pull the trigger on your franchise program can be the difference between an Emmy-winning performance and a total flop.

I’m talking about whether or not the market is ready for your franchise to emerge or move to the next level in growth. It’s a difficult thing to admit to oneself, but sometimes there simply isn’t room for another player in a particular industry sector. CBS waited patiently—well maybe not patiently, but it waited nonetheless—for two decades before it was able to introduce a show that could compete with “The Tonight Show.”

Now, according to 2018’s first-quarter Nielsen ratings, CBS’s “Late Show with Stephen Colbert” continues to lead “The Tonight Show Starring Jimmy Fallon” in popularity and ratings, a trend Colbert has maintained for the last several years.

When you can identify gaps in your particular sector, perhaps because legacy brands are getting older or because other emerging brands aren’t establishing themselves as players, you can find your position and capitalize on it. But, be sure your business is stable enough for this push. If you are experiencing any decreases in sales or profitability, aggressive franchise expansion may not be the right course of action for you just yet.

Before taking new steps to promote your franchise concept, you should conduct a thorough market assessment. Learn who the major players are—are their sales declining or increasing? Learn who the newcomers are—have consumers embraced them positively? And learn where your place is within the mix—know who you are, what your brand has to offer, and leverage it at every turn.

Embrace the spotlight

While there are dozens of ways to differentiate your franchise from the competition, it’s important to understand where your greatest opportunities lie. CBS saw Letterman’s edge resonate with audiences and knew that when the opportunity presented itself, he was their best chance to knock off NBC’s late-night crown.

Learn how your competitors think, act, and more importantly, how they market their opportunity. Knowledge is power in the world of competition, and the more you know about your adversaries, the better equipped you are to challenge them. Your competition won’t even know what hit them, as the curtains open and you take center stage.

Mark Siebert is CEO of franchise consulting firm iFranchise Group. Reach him at 708.957.2300 or info@ifranchisegroup.com. His new book is “Franchise Your Business: The Guide to Employing the Greatest Growth Strategy Ever.”

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