Southampton 02380 482 482
Winchester 01962 679 777
Paris Smith

12th August 2015

Project Miner – the future of franchising?

12th August 2015

Project Miner – the future of franchising?

Emily Sadler

Posted: 12th August 2015

T: 023 8048 2102

E: Email Me

Yesterday saw the launch of a new game for the iPhone and iPad called “Mine that Gold” in which players have the objective of searching for virtual gold. The game’s USP is that players can exchange the virtual gold they find for real gold.

What is particularly interesting and innovative about the game however is that investors can take a 3 year franchise with Project Miner which buys them a “mining level” within the game in which they can make money through advertising and in-app purchases. The franchisee manages their virtual business by firstly naming and designing their level and then promoting and advertising it via different market routes. Full training is provided by Project Miner and the franchisee is free to sell the franchise to a purchaser with Project Miner’s prior consent.

On the one hand, Project Miner seems far removed from business format franchising and the concept seems to be rather shoe horned into the traditional franchise model. It is a long way from what the public and indeed the franchise industry perceives to be a typical franchise business. Domino’s pizza it is not. There is no tried and tested system (usually the essence of a good franchise business) as not only is this a brand new business but it is also a completely new concept in franchising full stop. I for one cannot make up my mind whether the idea is brilliant or just too much of a gamble as presumably, the success of the franchisees will largely depend upon whether or not the game is the next big thing.

However, Project Miner has some big name “professional partners” all with a good reputation within the franchising industry and they therefore appear to have taken the time and expense of being properly advised. Plus there is no doubt that video games and mobile apps are big business and that the market is still in its infancy and therefore presents an excellent opportunity. In 2014, the sector generated over $90 billion in overall revenue with the current top game, Clash of Clans making a reported $650,000 a day in advertising and in-app purchases. After the success of the Candy Crush phenomenon and the company floating for over $7 billion, people have been looking for a way to tap into this lucrative market and maybe Project Miner holds the answer. Only time will tell…I will be watching with interest to see how these plucky franchisees get on.

Emily Sadler is a franchise law specialist and Paris Smith is an affiliate member of the British Franchise Association.

Share This

2 Comments

  1. Michael

    How is this classified as franchise first of all? Seems like just a typical sale transaction of a level in a game.

    Reply
    • Paris Smith

      There is no specific legal definition as to what constitutes a franchise. The BFA defines franchising as “the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to own and operate their own business under the brand, systems and proven business model of the franchisor. The franchisee also receives initial training and ongoing support, comprising all the elements necessary to establish a previously untrained person in the business.”

      As I have said in my blog above, whilst the Project Miner concept does contain elements of business format franchising, in my opinion the concept does seem to be rather “shoehorned” into this traditional definition.

      Emily

      Reply

Comment

Emily Sadler

Posted: 12th August 2015

T: 023 8048 2102

E: Email Me