{"id":732,"date":"2016-10-25T15:39:40","date_gmt":"2016-10-25T15:39:40","guid":{"rendered":"https:\/\/thefranchisecourier.com\/?p=732"},"modified":"2016-10-25T16:30:27","modified_gmt":"2016-10-25T16:30:27","slug":"the-apple-franchise-why-does-it-work-so-well","status":"publish","type":"post","link":"https:\/\/thefranchisecourier.com\/the-apple-franchise-why-does-it-work-so-well\/","title":{"rendered":"The Apple Franchise \u2013 Why Does it Work So Well?"},"content":{"rendered":"
The Apple Franchise\u00a0<\/strong><\/h2>\n
Apple has us all by the ear and literally tells the consumer what they want\u2026.no, what they need.\u00a0 They convince us to purchase items that we certainly can live without, pay two to three times more for the items, and then they upgrade their software so that the items we just purchased become irrelevant and we have to buy the next version.\u00a0 Recently, the iPhone 7 was released and the world was again convinced to spend what is an amazingly high amount of money on a phone (79 Million iPhone 7\u2019s are projected to be sold for a whopping $78.9 Billion).\u00a0 The amazing aspect to this is that all of these customers already have a smart phone, so Apple is either convincing existing customers or taking market share from other brands.\u00a0 It of course, helps when your major competitor\u2019s product is lighting on fire when plugged in, but still, this is one of the most miraculous cases of a franchise taking hold of the market and managing a brand in it\u2019s entirety.<\/p>\n
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Apple does not offer franchises of their business model, but the reason I would describe them as a franchise as they fit the broader description of a franchise business.\u00a0 Apple leverages multiple channels of distribution for their products, promotes the brand around the world through their strategic partners, an amazing array of marketing mediums.\u00a0 The Apple Franchise couldn\u2019t be more successful and the stock price represents this.<\/p>\n
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What is of particular interest is the Apple Franchise at the unit level.\u00a0 Being involved in the franchise industry, unit level economics are of particular interest and help quantify the enormity of Apple\u2019s success.\u00a0 Success at the unit level is generally measured by sales per square foot.\u00a0 The top retailers in the U.S. were Michael Kors ($1,466 per square foot), LuluLemon ($1,560 per square foot), Tiffany & Co ($2,951 per square foot) and Murphy USA ($3,721 per square foot) Apple as of May 2016 was at $5,546 per square foot in sales.\u00a0 Literally a mind blowing number when you consider that the average Apple Store has recently increased to 8,400 square feet in size.\u00a0 If you do the math, the number is $46,586,400 in annual stores per Apple Store.\u00a0 I guess this shouldn\u2019t be surprising when you consider every time you walk past an Apple store in the mall it\u2019s like a beehive swarming with customers and the rest of the mall is often sleepy and quiet.<\/p>\n