Unpredictable R&D⁺ means you don't know when research will succeed. Taken at face value, this means you cannot set a deadline having any meaning (i.e., all deadlines are arbitrary). However, individuals intimate with the research, the franchisee⁺ team, do have a sense for when certain 'events' of importance will happen. No arbitrary deadlines means those intimate with the research can set their own deadlines, but we do not allow deadlines imposed from the outside.

There also are no mandates for disclosure of self-imposed deadlines. And, we also don't use funding restrictions as a back door to impose arbitrary deadlines (Right #5).

Whyfor:

• Creativity doesn't tolerate deadlines. The moment you set a deadline is the moment everyone looks for satisficing answers instead of rigorously tested answers. Shortcuts, missed opportunities, and questionable data become the norm. Deadlines crush creativity and increase the rate of failure in investments (for unpredictable R&D).
• Creativity is all about tacking and turning, of running studies just to be able to ask the right questions, of pushing ahead based on an implicit understanding in the absence of data; and of a thousand other nuances special to creative environments. These are not subject to deadlines.
• Creativity does not punch a clock: it's nurtured. The best we can do is to point creativity in the direction of commercial success, and ensure researchers sense they are using up their inheritance when they spend our funds.
• Researchers have internal deadlines, but they are tentative, subject to constant revision, and are only honest when voluntarily submitted.

Found Here:

• Ratings, which greatly affect franchisee share prices and hence length of available funding, are based on results, not on goals. Franchisees tell the funding agent what they intend to pursue during the upcoming period, but it's just an alert so representatives of the funding agent (independent evaluators) can focus attention on what's important. It's not a goal against which future results are measured.
• If a promising opportunity surfaced during the last rating period, researchers would have been expected to exploit this opportunity even if it interfered with their internal schedule.
• We recognize different teams, facing different research challenges, will follow different schedules. Time to the next advancement or windfall is not of the essence. Results during the evaluation period are the only measure that matter. Results are time- and goal- independent.

Unpredictable R&D means you don't know where it will succeed. Taken at face value, this means you cannot pick a commercial direction having any meaning (i.e., all mandated commercial directions are arbitrary). However, individuals intimate with the research, the research team, will start to see specific commercial directions emerge which are quite attractive. No arbitrary commercial direction means no commercial direction imposed from outside the franchisee. Commercial direction may give a sense of comfort to the funding agent, but it's a false sense of comfort and positively harmful to productivity.

Whyfor:

• Success is often found far afield from the intent when the research first starts. Researchers must engage in constant tacking and turning; and be prepared to recognize and exploit unexpected findings and opportunities.
• Although teams often start their search looking for physical products, success is often found in services, supplies, maintenance, financing, add-ons, etc. The commercial potential of these non-physical opportunities only becomes apparent well into the research.
• Success often comes in many small increments: a constellation of products and services clustered around a common symbol, brand or physical artifact. Success of this type often 'emerges' once a product is on the market and consumers discover novel applications of the product.
• Artificially imposed commercial directions give decision makers a loophole. They use lack of progress in the arbitrary direction as an excuse for their own bad decision making.

Found Here:

• We select pre-game⁺ investments based on the science platform, on its ability to launch off into many commercial directions.
• We reward franchisees (give them good ratings) partly on their ability to maintain and grow a scientific competitive edge⁺, which is defined as the ability of the science platform to enter into even more commercial niches.
• We rate franchisees, and disburse cash, based on results, and not on progress in any particular commercial direction.

Unpredictable R&D means you don't know when or how much research should be valued, beyond estimates for the immediate future (next quarter). Taken at face value, this means you cannot forecast windfalls or advancements beyond 1-2 quarters in advance (i.e., all longer forecasts are arbitrary). However, individuals intimate with the research, the franchisee team, regularly estimate further into the future.1

We prohibit financial forecasts based on windfalls or advancements from being presented as evidence during major funding decisions. We prohibit reporting of forecast data from franchisees. We do this to limit the temptation of funding agent representatives to build these forecasts.

Whyfor:

• Forecasts have a nasty habit of becoming perception. There are personalities (the quants) who will insist on guesstimates. These guesstimates somehow make it into the public realm, and their baseless foundation is quickly forgotten. All manner of havoc ensues.
• Forecasts act as a crutch for financial analysts, with the allure of order and objectivity as represented on a spreadsheet. We want dynamism in the funding approach similar to what we expect in research: doing whatever it takes to secure the funds needed by franchisees to prosecute their research, no matter when in the year the need arises. We avoid mechanical approaches to funding based on a budget. Forecasts have a nasty habit of turning into budgetary restrictions or across-the-board cost cutting.
• With data in hand, quantitative analysts will come up with all manner of financial gymnastics to 'predict' the unpredictable (e.g., shots on goal⁺), indirectly wreaking havoc.

Found Here:

• We forecast availability of lines of credit and funding available from other derivative investment vehicles⁺ (our safety cushions), but not advancements or windfalls in franchisees.
• Windfalls represent potentially the largest contribution of funds to the funding agent over time. We don't count on them as a source of funding, but we plan ahead in case they happen.
• We do not impose arbitrary limits on the number of new franchisees (i.e., advancement into pre-game). We may get zero; we may get dozens. The only throttle comes from the ability of franchise operations⁺ to handle the bolus, but not from funding limitations.
• There is a point in the life of every franchisee when a forecast will be mandated. Franchisees must request a slot on the docket for a decision to commercialize their research, and this typically is made 12-18 months prior to the decision. But requesting a slot on the docket does not guarantee advancement into commercialization⁺.

We don't track research 'projects' on Gantt charts or milestone charts. We don't name research projects (pre-commercialization). We do not designate hurdles, stage gates⁺, phases or proof-of-concepts. Prior to commercialization there are no pre-defined stages of completion. Think instead of research as a gradual clarification of the right thread through a network of intertwined, dimly-lit paths. We have a feel for the layout of the landscape, but paths frequently double-back and interconnect. A fixed milestone marker would show up multiple times during our travels.

Those intimate with the research may track short-term milestones, but there are no milestones imposed from outside the franchisee. That is to say, there are no restrictions on spending based on artificial notions of a milestone, and no penalties for refusing to disclose internal milestones. Milestones become a backdoor for arbitrary commercial direction (Right #2), which we prohibit for pre-commercial research.

Whyfor:

• Tangible product milestones are meaningless – they're too easy to manipulate. It's too easy for researchers to delude themselves into thinking they're making progress by ticking off squares on a checklist.
• The moment a project is named is the moment future options get shut down. Unpredictable R&D is all about creativity, and creativity cannot be tracked or designated. We run studies just to be able to ask the right questions.
• Milestones present too much of a temptation for quants and project managers to meddle. They attempt to combine quantitative results from across investments and draw conclusions requiring management attention. We simply prohibit reporting of the data used for these artificial measures.
• The only unambiguous measure of progress is commercial success – customers reaching into their own pockets and paying for your products. Intermediate milestones are an artificial creation of managers looking to excuse their lack of attention to the details of the research.
• Milestones have a habit of getting transformed into deadlines (i.e., deadline for what), which we prohibit.

Found Here:

• Independent Evaluation discounts intermediate milestones when assigning franchisee ratings (pre-commercial). These milestones are too easy to manipulate.
• Independent Evaluation instead looks for mastery of the fundamentals needed for membership⁺ at the next level – we have an independent agency (watchdog⁺) constantly tweaking the formula to ensure these fundamentals will contribute to eventual blockbuster⁺ success.

We're talking about funds available to operate a member-franchisee, as provisioned by the funding agent. Key is the word arbitrary. This does not mean unlimited. We protect against funding agents using operating funds as a backdoor for artificial deadlines or project milestones. In Franchise Capital Management⁺ we accomplish this feat (balancing not arbitrary with not unlimited) through ownership. We have franchisees sell shares in their own company to obtain operating funds. They'll only sell shares for what they need.

We expect researchers to seize unexpected opportunities. As research progresses, unexpected opportunities are routinely uncovered and we want researchers to take the time and to spend the funds necessary to exploit these moments. Unexpected findings are inherent to the commercial pursuit of unpredictable R&D. Commercial success often is found far afield from the primary line of inquiry. Researchers are not hamstrung in the availability of funding in order to make this happen.

Whyfor:

• Funding limitations would be a backdoor for meddling (e.g., backdoor for deadlines, commercial direction, milestones, etc.).
• Having no arbitrary funding limitations will keep funding agents on their toes. Annual budgets are only directional. Funding agents need to ensure much more money can be made available, just in case (line of credit).
• We don't want franchisees burying the talents. Franchisees must seize unexpected opportunities, and in doing so spend funds in addition to pre-planned expenditures.
• Elimination of artificial limits on funding is made possible by the power of the blockbuster pursuit – you physically can't spend money fast enough to turn a (true) blockbuster unprofitable (note: the blockbuster definition includes the requirement for maintaining customary industry margins).

Found Here:

• Use of funds = loss of ownership. There are no restrictions on the availability of funds, but franchisees only have so much ownership.
• We take a guess at a deadline (artificial) and use this to set the franchisee share price, which sets the burn rate⁺, and therefore the length of available funding.
• When the franchisee reaches the next advancement or windfall, ownership shares get replenished (resetting the length of available funding). Should the franchisee beat our guess, they get more ownership when shares are replenished. Should the franchisee take longer than our guess (with good ratings) we allow them to issue more shares, diluting the value of existing shares (held by the funding agent), and lengthening the time of available funding.
• Franchisees get a reduced rating for not exploiting unexpected opportunities. We demand this exploitation even if the expenditures weren't part of the original plans.

Intermediate, pre-commercial research is often sold by start-up companies in order to obtain operating funds. Not infrequently this involves sale of 'the crown jewels' – selling or licensing the underlying science platform. This often is done by rent-a-managers looking for a quick buck. These managers are not infrequently brought in by funding agents with the hopes of salvaging something from an investment before an arbitrary deadline expires. This is the equivalent of mortgaging the future⁺ of the franchisee – dooming the venture to sub-blockbuster⁺ status.

The key word is 'forced'. Franchisees may decide to sell off intermediate research either because it lacks blockbuster potential, or because it will be too expensive to develop into blockbuster products (e.g., required external licenses may be too costly). As long as franchisees recall that intermediate sales do not reduce the obligation for launching two major commercial products, they are free to sell intermediate products (but not the crown jewels).

This limitation is extra protection against the funding agent reneging on original agreements at the first sign of funding troubles. The funding agent cannot be allowed to 'harvest' intermediate products by cutting 'deals' with select franchisees.

Whyfor:

• Harvesting of pre-commercial research is often used as a crutch by funding agents, instead of doing their job of lining up robust funding for any future eventuality.
• Harvesting sets a precedent that undermines effectiveness in research. If franchisees start to believe they can cut deals mid-stream, then they take shortcuts to develop products only worthy of mid-stream sales.
• Harvesting makes uniform enforcement of rules (Right #7) difficult, if not impossible. Why this time and not that time? You will have to bribe a franchisee to do this (e.g., provide an exemption on the number of major commercial successes needed to exit membership). How will you explain this exemption to other franchisee owners?
• The farther the research from being commercialized, the greater the ambiguity surrounding its eventual success. This can lead to lemon market sales behaviors, which can damage later legitimate commercial sales for all franchisees.
• Prohibition of harvesting provides protection for the value of the eventual firm spun off from franchise membership. Owners are not forced to mortgage their future. They protect the value of the commercial firm for when they finally go independent. This is motivation to put in as much extra effort as needed to succeed during the interim.

Found Here:

• Commercial success (blockbuster success) is integral to the branding of franchise capital management. We exercise tight controls over pre-commercial sales to ensure they don't damage the branding of the funding agent (e.g., lemon market sales) and its franchisees.
• Franchisees have sub-blockbuster responsibilities, as well as blockbuster mandates, but understand they should not cut themselves short by selling blockbuster-potential intermediates. There are no exemptions from having to achieve two major commercial successes in order to exit the franchise.
• Franchisees may decide to sell intermediates, for example, when the cost of needed third party licenses is too high for economic development of a particular line of research, and they receive credit for pre-commercial sales (Obligation #5), but these sales are considered interim windfalls, and are reinvested back into franchise operations (Obligation #3). Intermediate sales are not a way for franchisees to extract early money.

We're building a new social order here. Franchise Capital Management represents a new way for researchers and investors to come together, different from the corporate model or the venture model. We need replicability for this social order to emerge and be sustainable, and this replicability comes from rules and the respect for rules: one-size-fits-all⁺ rules.2

Nowhere are rules more important than in the handling of money. Funding agents must adhere to a rigid set of rules that are highly resistant to manipulation. There can be no exceptions. At the first hint of deception, investors will vote with their feet, and investments (owners of intellectual property⁺) will look for the emergency exits.

For example, pre-IPO⁺ share prices for franchisees are imputed following a set formula. Achieve these results at this stage in your development and your shares will be worth this much. Investors care because they don't want to be caught up in a Ponzi+ scheme. Owners of intellectual property (franchisees) care because they are assigning rights to their IP in exchange for a set funding formula, one that won't tilt against them for potentially 20 years (either directly, or through favoritism to other members).

Whyfor:

• There was no precipitating event for the 2008-2009 global economic crises (with securitized mortgages). It was a cascade of mistrust (or uncertainty) occasioned by small rumblings of doubt. We must set and publish the rules for funding and live by these rules. Trust in the funding agent is the basis for sustainability of the entire enterprise.
• We can't afford a culture of disrespect for rules. We're dealing with difficult human behaviors and our target audience will often need to give us the benefit of the doubt. We'll never get franchise operations completely right. If we get it wrong and our audience trusts us, they'll forgive us. If our audience distrusts us then every peccadillo or misstep will serve as confirmation of their distrust, sending both parties down a spiral of mutually escalating destruction. (see calculated vs. implicit trust⁺)

Found Here:

• Independent Evaluation ratings used to set pre-IPO share prices for franchisees are applied uniformly (by investment category⁺) – we are deadly serious about maintaining the independence in Independent Evaluation, the body responsible for these ratings.
• Franchisee share prices are level set by prices realized during open season⁺ in the perpetual fund⁺ (the value of which must be a summation of all imputed values for franchisee shares). Investors should feel more confidence we are not running a Ponzi scheme. Our imputed share prices are periodically adjusted to reflect realized market prices.

Unpredictable R&D means it's almost impossible for funding agents, looking in from the outside, to make decisions free from bias or the 3 C's⁺. We set it up instead so team members will be their own worst critics. Internal motivations and introspection are far more compelling and revealing than anything we can impose from the outside. Incentives (or penalties) imposed from the outside often give individuals mental leave to excuse their own failures (see freakonomics day-care experiment). We set it up so incentives and penalties come from inside the individual. Having a sense of ownership is the best way uncovered so far to make this happen. Individuals feel they are mortgaging their future (spending their inheritance) when they don't perform to their own internal expectations.

Whyfor:

• Owners do what it takes to be successful. They put in of their own resources without a second thought. They are relentless in comparing their progress to others they consider peers, and in redoubling efforts to out-compete those peers.
• Owners don't count pennies. They focus on activities and expenditures giving the most value to their franchisee.
• Owners don't mortgage the future. They understand the need to invest in the science platform in order to maintain a competitive edge that will sustain them after independence from the franchise.
• Owners are passionate in defending their case, and will act as needed counterweights to the often pretentious behaviors of funding agent representatives.
• Owners deeply care how others spend their money ostensibly to make them more productive. This will increase the pressure on franchise operations to show constant improvement.

Found Here:

• We set each research unit up as a separate legal entity starting with 80% ownership. The research unit sells shares over time to the funding agent in order to obtain operating funds.
• We don't let franchisees fall below 30% ownership and risk having them walk away (mentally) from the research.
• We replenish ownership percentages based on major advancements or windfalls. You give away ownership to raise operating funds, but can earn it back
• Owners have recourse to watchdog for their complaints, without recrimination in future ratings or funding decisions. Watchdog allows owners to be aggressive in their demands on funding agents.

Our investment model selects science platforms with potential for multiple blockbuster products, and we commit franchisees to prove this potential by launching two blockbuster products. This is a long term proposition. We don't want individuals joining the franchise with the unspoken intention of retiring after their first substantial success.

We seek individuals who want to own their own ongoing, outrageously successful firm. We want you to exit the franchise knowing how to run a going concern: your science platform will be intact, you will have a revenue stream, you have easy me-too⁺ or knock-off products lined up, and you have a track record (along with a substantial commercial presence)

Whyfor:

• Long term commitment helps, significantly, in funding agent branding for up-front investments. We don't want one-pony acts: we want the full circus. That is to say, we want to attract owners of intellectual property willing to build an ongoing firm with the capability to launch a stream of blockbuster products.
• We invest much time, money and effort in getting franchisee leaders and teams inculcated into our way of doing research, and we want to maximize the return from our investment by having them stay the duration.
• We set up the firm in perpetuity (the perpetual fund). It's not dependent on any one or few funding agents or owners of intellectual property. It is set up so employees join the funding agent or the franchisee with the understanding they may have to wait 20 years to cash out. This is not an in-and-out exercise. Human behaviors are tough, and many years of experience (maybe a decade) are needed so new team members can fully appreciate the complexity of their endeavors. From behaviors to blockbusters is quite a leap.
• Exceptional leaders may start to believe they can go it alone, and they may be right. We commit these exceptional leaders to stay the duration and contribute to the success of other franchisees via their membership. Not-so-exceptional leaders may also discount the benefits they received from membership. We want these leaders to stay-the-course so they too can become exceptional.
• There will be lots of ups-and-downs, false turns and backtracking in the research. We also commit the funding agent to judge franchisees based on results and not progress. Stay the duration cuts both ways. Franchisees will not have the financial rug pulled out from underneath them based on artificial notions of progress on the part of funding agent representatives.

Found Here:

• Committing for the duration is integral to our branding. Owners of intellectual property will own 30% of a major corporation when they're done, which may take 20 years. Owners of Intellectual Property have assurances of funding stretching from inception through to being done.
• Members sign a binding contract to stay the duration.
• There are no arbitrary deadlines for 'duration' – owners of intellectual property must demonstrate repeated commercial success in order to exit. This is how we define 'the duration'.

Interim windfalls refer to influxes of cash from IPO and sales of commercial products or services. We take the franchisee and funding agent stakes in these windfalls (which can represent as much as 50% of the windfall) and plow these funds back into franchise operations. This can be billions of U.S. dollars, which can remain invested for decades.

Commercialization is expensive (potentially billions of U.S. dollars) and requires funding beyond what can be expected from outside investors. We borrow a page from the playbook of R&D-centric corporations. We invest past winnings. The difference here is the funding is being supplied by researchers and funding agents involved in daily operations, and not by an anonymous corporate budget.

Researchers and funding agents will be keeping these windfalls invested long enough so they can be productively employed in commercialization activities by franchisees. In our case, we mandate reinvestment of windfalls until the responsible franchisee has launched its second major commercial product. At that point owners and funding agents can withdraw past winnings.

Whyfor:

• You leveraged reinvestment by others that came before you, so you will help finance others that come after you. Since we're going to invest (heavily and painfully) in making you successful, we want reciprocity.
• We can only afford to fund expensive commercialization by having these windfalls, otherwise we would be forced to sell off intermediate, pre-commercial research (at bargain prices)
• When successful, certain individuals are going to be tempted to devalue the contribution they receive from membership in the franchise and think they can exit and do it on their own. Reinvestment is yet another tool we employ to win and keep their affections.
• Reinvestment is also helpful to encourage researchers to acknowledge when Mother Nature Leaves the Building. After a franchisee has completed an IPO or has had its first commercial success they stand to lose intermediate winnings by withholding this acknowledgement.

Found Here:

• Reinvestment is a contractual agreement for membership in the franchise, for both employees of the funding agent and of the franchisee.
• Intermediate windfalls are integral to the cash flows for the financial model for franchise capital management. All windfalls are available for funding of all franchisees.
• Individuals may potentially have tens of millions of US dollars reinvested in the firm, and no hope of extracting those dollars until the franchisee responsible for the contributing windfalls complete their second major commercial success. No exceptions to the rules (above). To increase the chance of success for specific franchisees, funding agents must increase the chance of success for all franchisees. Reinvestment is a powerful tool to focus funding agent and franchise management attentions on improving the overall effectiveness of franchise operations.

Researchers or management in the franchisees must be first to come to the funding agent with the news, should Mother Nature Leave the Building, that is to say, should the science platform no longer have potential for multiple blockbuster products. (...more)

There is no way for someone on the outside (the funding agent) to know when a science platform no longer can achieve repeatable commercial success. We picked the platform because of its manifold commercial potential, and there will always be enough ambiguity surrounding the science to argue for one more year of effort. Discounting cheap heuristics⁺, funding agents have no idea whether or not to continue with an investment in unpredictable R&D.3

We've set it up (for example, by enforcing the R&D Bill of Rights and Obligations you are currently reading) so franchisees have no extrinsic excuse for failure. We've tried switching out management, team members, and even portions of the science platform (i.e., by in-licensing outside innovation). The question remains, does the primary science platform, the basis for the original investment, still have the potential for multiple blockbuster products? Only the researcher on the ground has the intimate knowledge of the science to accurately address this question, so we must make it to their advantage to expeditiously come forward with this acknowledgment (and to their great disadvantage to delay).

Whyfor:

• The mission for the funding agent is to achieve accelerating per capita productivity growth (increasing productivity / growing investment base). Integral to this measure is to be smarter at discerning when an investment no longer has blockbuster potential. Stop too soon and you reduce the denominator (and potentially the numerator). Stop too late and you reduce the numerator. You can't cut your way to accelerating per capita growth.
• The only way to reliably discern when an investment no longer has blockbuster potential is to be on-the-ground at the research laboratory or in the clinic. There are a thousand promising commercial paths forward. Only researchers and their managers can easily recognize fundamental limitations in the science platform (e.g., physical limitations on the ability to reduce the costs of raw materials, in combination with few high-priced commercial options).
• Stopping an investment is highly emotional. Funding considerations are only part of the answer (e.g., researchers will ask themselves what they'll be doing when they wake up tomorrow). But funding often gets in the way of reaching the best decision. We set up funding so researchers at least have a financial incentive to admit the unpleasant news.

Found Here:

• End game⁺ is unique to franchise capital management. We invest in transition⁺ investments to make them successful (sub-blockbuster success) outside of the franchise. We do this by allowing owners of a transitioned franchisee to dilute the ownership shares of the funding agent so they have more leverage when they secure outside funding.
• Having the blockbuster as a measure of success makes it easier to know MNLB. It's much harder to fake the potential for blockbuster success. These are industry-changing products, and a few phone calls can validate any market claims.
• We have a very robust system for protection of intellectual property. Owners of intellectual property assign rights to the property upon joining. Intellectual property developed using funding agent money belongs to the funding agent. Owners of intellectual property risk losing access to their cherished property unless they are first to recognize and announce MNLB.
• We welcome repeat players (researchers already inculcated into the franchise-ways). If researchers come to us announcing MNLB then they can often get a second, third, etc. chance at launching new franchisees (pre-game) and renewing their quest to own their own billion dollar company.
• We place the decision to transition franchisees within Watchdog. This is a decision quite fraught with emotions. Funding agents are often tempted to demonstrate their leadership capabilities by 'making the tough calls' – in essence resorting to cheap heuristics and calling it leadership. Watchdog is dedicated to ever-improving its own quality in making these decisions.

Selling anything, even sub-blockbusters, makes for better researchers. It makes blockbuster success more likely. Researchers learn to appreciate the nature of the commercial equation⁺ and factor this appreciation into the next research study / product design. With unpredictable R&D you don't know the eventual customer, so launching a few smaller products gives you an excuse to engage in authentic conversations with individuals who hold the purse strings. These conversations are impossible to initiate in the absence of having a commercial presence, even a minor one. Get researchers and engineers out from underneath their hoods, out of their laboratories, so they better understand the nature of the commercial pursuit.

Fund raising is integral to running any business. Firms need practice at seeking investor dollars, investing those dollars, and paying back the investor with interest. They also need to get good at sucking at government or non-profit teats, a rather convoluted affair, but one that can yield vast quantities of cheap money or revenue. There are many other sources of funds. The franchisee gains an appreciation for how difficult it is to raise funds, and can better appreciate the contribution of the funding agent, and grows in appreciation of the value of their franchise membership.

Don't sell research products destined to become blockbusters or you risk delaying achievement of major commercial successes, and put in jeopardy the eventual success of the franchisee. Don't sell 'the crown jewels' or you put in jeopardy the long-term viability of your firm once you successfully exit from the franchise.

Whyfor:

• This is the franchisee's way of demonstrating they're not just doing research for the sake of research. They know how to go into the marketplace, convince individuals to reach into their wallets to buy products, and to gather authentic customer preference data.
• Me-too, add-on, and sub-blockbuster products are integral to the finances of any firm, so franchisees must develop these skills for when they finally exit from membership.
• Commercial and fund-raising experience makes for better researchers and research managers; commercial experience contributes to effectiveness in research (it does not 'detract' from research as is often claimed by academic researchers). One reason for this is researchers come to realize their job is to satisfy a living, subjective consumer perception, and not just to develop an inanimate, sterile artifact.

Found Here:

• Self-funding from these activities is built into the burn rate of franchisees (funding needed to reach next replenishment). You need self-funding in order to have enough operating funds to reach the next advancement or windfall without giving away too much of your ownership.
• These activities are built into a franchisees' evaluation ratings, which affects ownership percentages via the burn rate.

Franchise operations are the means by which we make franchisees more successful. Franchisee team members gain access to the best business, technical, legal and commercial resources available. They receive training and certification on the nature of effectiveness in commercial R&D. They receive on-the-ground facilitation and advice from dedicated independent evaluators. Leaders of franchisees are deliberately and repeatedly exposed to mentors, peers, exemplars, and opportunities & challenges that allow them to grow from good to great.

It takes resources to build an exclusive club: financial resources and sweat equity. Great clubs are only great through the participation and commitment of their members. Great (authentic) participation by members reinforces even greater participation by other members. Membership means success (i.e., a faster, surer path to repeated commercial products) and club membership is limited to those interested enough to participate in making club membership more valuable to all members.

Whyfor:

• We intend for franchisee team members and management to feel the privilege of membership in an exclusive club, but membership has both benefits and responsibilities. They'll feel membership more keenly by contributing to the growth and robustness of the club.
• Most managers are very poor at making major decisions (it's a very rare skill). We take away this responsibility from managers and place it into an agency dedicated to improving the quality of these decisions. These decisions affect the livelihood of franchisee staff, significantly, and therefore we demand their contribution to Watchdog activities so they feel ownership in its decisions (e.g., members of the jury in a Trial by Jury⁺). They may not like decisions that go against them, but they will learn to respect how the decisions were made.

Found Here:

• Franchisees agree to mandatory financial and sweat equity contributions to franchise operations: a 5% fee plus commitment of staff time and energies.
• Franchisee performance ratings are partially based on evidence of authentic (not perfunctory) contribution to franchise membership activities. Ratings set burn rates, which determine ownership percentages.
• Submission to decisions made by the watchdog agency is a contractual requirement for membership to the franchise.