The Future of Higher Education - A Franchise Model

“Over the next 10-15 years, the current public university model in Australia will prove unviable in all but a few cases.”

One Possible Answer...

Franchised Blended Learning Programmes

Higher education franchising is a growing phenomenon. As with all commercial investment in higher education, there are significant possibilities for problems. So far, the franchisers seem to be working on the McDon­alds principle. It would be interesting to ask why no one is looking at the educational equivalent of Intercontinen­tal Hotels—aiming at a higher-end market segment-—as a better model (Altbach 2012)

Think what happened to music distribution, and newspapers. The key difference between music/tv/etc and education is that education will often (but not always) benefit from a face to face component, and a local content component, lending itself more often to the franchise model over the fully centralised MOOC model.

Lessons from the past...

There were few signs of trouble in the newspaper industry before a critical mass was reached (in online readership), and then a very dramatic drop in revenue. This has happened in a number of other industries of course, most notoriously in the music industry. Since then they’ve lost 88% of their stock value, dramatically cut costs and staff, they belatedly moved to an online model to stay afloat.

In education, there has been an increase of around 12–14 percent per year on average in enrolments for fully online learning over the five years 2004–2009 in the US post-secondary system compared with an average of approximately 2 per cent increase per year in enrolments overall (Allen, I. E. and Seaman, J. 2008)

Drivers...

•Globalisation and the internet have already resulted. in Universities competing against each other globally, and will lead to dramatic rationalisation, and improvements in economies of scale in delivery, and larger investments in quality control and marketing.

•An internationally mobile workforce will drive employers to increasingly prefer courses that have a global reputation and quality standard (over a local unknown university)

•International Marketing will drive employees to increasingly prefer courses that have a global reputation and ‘known good’ quality standard. The quality standard will not just be tied to the academic reputation of the author. But significantly to marketing, pedagogy, and quality control. The new top 50 university brands may therefore be different to the current top 50, based on whoever adopts this model first, and establishes a reputation for their franchise.

•Rationalisation in a global market means it is untenable that 20,000 universities will be creating or certifying ‘Introduction to Business 101’ when it can be done to a much better standard and a much lower cost, by just 50 universities. There will be rationalisation.

Through collaboration and economies of scale it should be possible to deliver:

• Much higher quality courses
• Much cheaper courses
• Protect provision of diversity. When a course may not be sustainable at a single institution it may thrive at a national or global scale.

The Model...

The model holds that there will only be three types of programme delivered by a University:


•Franchisee - Local delivery of a course/programme written and owned by another University that is an acknowledged worldwide brand/leader in that course. There will be less than 50 course franchise author/owners for each programme. The owner will collaborate to customise courses for different environments. E.g. James Cook has a chance to be one of the top 50 Marine Biology franchise owners, if they move now.
•Franchiser: The most lucrative but hardest to achieve: Creation (and delivery) of an internationally franchised course/programme actually written and owned by the University itself, with a market leading reputation, demanded by employers and employees.
•Custom: The least common & least lucrative: Delivery of a custom local course/programme that has little international or national franchise potential, for the local market. Least number of students. 

Strategy...

•Franchiser? Identify the key areas you can compete internationally on, and build an internationally competitive course or programme, and aggressively franchise it for delivery around the world, certifying delivery by other universities.
•Franchisee? Where you are not a world leader, seek out best of breed courses authors by other Universities, to deliver more efficiently and at a higher quality.
•Local Needs? Identify what courses might be required to service just the local market, that are unlikely to be delivered under the franchise model.

The Franchiser...

A franchise course is one that would typically :•be written by a university known for leading research in the field; •have a higher number of professional designers;

•involve local collaborations to customise to different markets. I understand for instance that US education providers are doing this in Nursing for the Australian market;

•have a bunch of people marketing it, and certifying delivery at other unis, to maintain reputation and quality control and therefore marketability.. to the extent that students looking for a course in Miami for instance would demand to study a well known internationally branded course at Miami University.

Change Plan...

•Identify the schools that are capable of being truly world class, delivering programmes that internationalise well.
•Partner and Merge: Find partner institutions and start with a contra deals with another respected universities where we will deliver their ABC programme if they deliver our XYZ programme, and grow from there. This could also be achieved by amalgamating the schools of two institutions together. e.g. Marine Biology with James Cooks into one school to create world programmes.
•Design: Inject world class blended learning ed designer resources to that school.
•Certify: In the same way as Microsoft certifies its training providers, the school would have to create a process to certify the instructors at many other institutions (100s) that will deliver the programme. The same process would be applied to local instructors.
•Market: Build a marketing capability to aggressively sell the course to other institutions as a package with the advantage it being: world class course materials based on world leading research, using best practice teaching

The Transition Period…

•Traditional universities may be bypassed as partners for delivering franchises, as too inefficient. Likely a modern blended course would require much more modern delivery environments and organisations (online and off). Actual test delivery could be outsourced to organisations like Prometric.

•Traditional universities that are not preparing now to be in the ‘top 50’ author creator franchise owners, will probably be left behind, and have to chose between delivering franchisee or local courses (requiring dramatic changes), or contracting to pure research model through loss of students.

•The best model for could therefore be a combination of type1 and 3 courses along with more focused research.

•The eventual top 50 are the ones that are quietly and frantically building their new business now, and not just experimenting.

Are you ready for this?...

Thoughts?
Simon Collyer

References
Allen, I. E. and Seaman, J. (2008) Staying the Course: Online Education in the United States, 2008 Needham MA: Sloan Consortium

Allen, I.E. and Seaman, J. (2003) Sizing the Opportunity: The Quality and Extent of Online Education in the United States, 2002 and 2003 Wellesley, MA: The Sloan Consortium

Altbach, Philip G. (2012) Franchising: The McDonaldization of Higher Education 
Cavanaugh, John  and Cavanaugh, Christine  (2006) Franchising Higher Education