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Implementation of Franchise University

Implementation of Franchise University

Situation

In 1997, after a significant worldwide correction to the Pepsi Cola business, Mr. Gonzalez was invited from Spain to join the Corporate HQ in Purchase, NY. The International business had finally defined a way to go forward to grow the franchise business. The HQ had two senior executives developing a solution that called for concentrate price increases worldwide. This solution was to be taken to the CEO of PepsiCo two days after it was presented to Mr. Gonzalez.


Actors

  1. The two executives who developed the solution
  2. The CEO and President of Pepsi Cola International
  3. The Head of Human Resources of Pepsi Cola International
  4. The Executive Vice-President of Operations of Pepsi Cola International
  5. A consultant from Accenture that was to aid Mr. Gonzalez on conceptualizing how to roll out the solution
  6. The 100 Franchise Managers around the world who needed to implement the change
  7. The Bottlers around the world

Solution

Mr. Gonzalez is an Internationalist who at this moment had lived and worked in four continents. He immediately knew that the HQ's proposed price increase of concentrate could not be executed without significant legal battles in every country around the world. Based on his experience in the franchise and bottling businesses, Mr. Gonzalez knew that upsetting the Bottlers would produce the opposite results than those the CEO wanted.


He went into a fox hole with the Accenture consultant and prepared a discussion document to present to the CEO. At the meeting, Mr. Gonzalez put on the table the interests of all the Actors and explained without passion why the proposal would not work. He recommended a model where the Bottlers could increase their profitability through better management of the Marketing spending — more volume, more profits for all.


Franchise University

Instead of price increases, Mr. Gonzalez created Franchise University — a rapid capability-building program to train the 100 Franchise Managers around the world. The university accelerated market plans and drove eight consecutive years of market share gains across the international franchise system. It became a model for how PepsiCo developed franchise talent globally.