All About Franchise

Advantages of Franchise Business

• A good franchise concept rewards the investor with faster start up and quicker positive cash flow
• A good franchise opportunity provides a proven strategy with documented systems for all aspects of the business. Those systems eliminate costly trial and error for the new business owner

Proven concepts and financial results make franchising a powerful choice.

Usually a franchise grants an owner the right to market and conduct business using a recognized brand in a designated territory. The established systems allow for a faster start up, leading to a quicker break-even point and better cash flow than a typical new business. Arguably those are key goals for any new business owner.

If you are considering a franchise business, it is essential you understand how that business model works, your alignment to work within the franchise system, the fees involved, and the franchisor’s expectations from you, the franchisee.

Every franchisor expects franchisees to follow established rules and guidelines to ensure a consistent, quality product or service.

Branding

The franchisor has established and proven business plan to make franchise business successful. Franchisor will have heritage and all the required certifications of the products and services and consumers are driven to purchase products and services they can trust. Franchisees offer the familiarity and company reputations customers crave. The company has figured out the sales and marketing mix that will successfully drive customers to your business. Generating customer leads from an proven business model is a major advantage of a franchised business.

Training

The faster you and your team are trained on what to do and how to do it, the greater your success. The franchisor wants you to succeed and provides the training and support necessary to make that happen. With a franchise business, you receive a tried and true road map to success. Learning by trial and error costs, time and money.

Time

Establishing a business from the ground up requires time. Every detail demands focus and study and mistakes can be costly. While independent start-ups can take years to reach critical mass, franchise business typically cut six months to three years from that time, speeding your journey to positive cash flow and operational success.

Established Procedures

If you are new to setting up operations and procedures for a business, you will surely benefit from the established systems and procedures in place with a good franchise business. A franchise business gains you access to traditional procedures in all aspects of the business. You will be guided through sales plan, customer acquisition, customer care, facility design, right mix and quantity of inventory ( stock ) purchases etc.,

DISADVANTAGES OF TAKING A FRANCHISE BUSINESS

Limited Control

If you want to pave your own way and do not want to be bound by established processes and procedures, franchising may not be for you.

FRANCHISE BUSINESS AS BETTER ALTERNATIVE TO TRADITIONAL EMPLOYMENT

95% OF FRANCHISEES ARE STILL IN THE SAME BUSINESS AFTER 5 YEARS ALSO

In today’s global economy, there are many reasons why people choose to be self employed.

• They do not want to be dependent on someone else to give them a raise or a promotion
• They wish to take their financial destiny into their control
• Bet on themselves and not on the lottery
• They can reap the direct rewards of their hard work
• Studies show's that franchises are an easier way to be self employed. You do not have to start from scratch and can build on someone else's proven business model
• Benefit from the experience and support from your franchisor
• All the systems and procedures to run the business have already been setup. Get started in a much shorter time than with your own business
• Lower chance of making mistakes than with an existing business model
• You can get a sales and marketing plan for your business from the existing brand that has been developed by the Franchisor
• It is easier to sell a franchise business for the same reasons mentioned above

Why select Franchising over starting on your own business concept?

Trend of entrepreneurship growing rapidly globally and importantly in india, there is a sharp growth in entrepreneurship nation wide.

How Franchising Works

Franchise business is most public of business formats. Franchisors carry strong success background and have far-reaching distribution channels, and produce a uniform product. A true franchise business grants the franchisee rights to its trademark, but also provides a complete business blueprint, training in all aspects of the business, and on-going operations and marketing support.

It all Starts with a Good Idea

Every franchise business stems from a business with proven success. When the product or service receives unprecedented interest, the franchisor/company decides to duplicate the successful concept. The success of the resulting franchise businesses depends on the ability to duplicate the concept and distribute the product or service on a large scale.

Global Success

Franchising has developed into a worldwide trend, stimulating entrepreneurship and creating jobs and wealth throughout the world. As one of the strongest mechanisms for growth, franchising is making huge strides in developing countries.

Business Duplication

A strong franchise concept duplicates a good product or service, and that familiarity makes customers feel comfortable and safe making purchases. This consumer trust keeps pressure on the franchise brand to maintain high standards and innovate in order to keep customers happy.

Challenges of Franchising

The biggest challenge lies in acceptance of the franchise system. While franchisees may be attracted to becoming their own boss, they remain contractually bound to the franchisor’s operational guidelines.

The Bottom Line

Franchising taps into a business concept that has already proven itself. The business has an established infrastructure and has already captured the market. Essentially, all the franchisee needs to do is invest in a business, follow the defined format and put in the effort to run the business.

ADVANTAGES AND DISADVANTAGES OF OWNING A FRANCHISE BUSINESS VS STARTING YOUR OWN BUSINESS

Investing in a Franchise business

Advantages

Proven business model

Training and support

Higher success rate

Faster learning curve – Saves

Faster resale for higher multiples

Purchasing power

Disadvantages

Must follow the system

Complete accountability

Buying franchise rights for period of time