Many franchise experts believe that owning a multi-brand franchise is a lucrative way to grow. The acceptance of the concept of multi-brand outlet (MBO) is still at its nascent stage in India. Read on to know more about this not-so-popular but highly ben
A franchisee who is successful in operating and managing his/her first franchise often looks at new opportunities for expanding the business. One of the most lucrative ways to expand further is making your outlet a multi-brand outlet. Owning a multi-brand franchise is a wonderful option to increase your profit share. As Rod Young, ED, DC Strategy says, “Proven brands usually seek to bulk up their network size by developing or acquiring a second and in some cases third or fourth brand to leverage their talent and build real enterprise value.” Due to the rising popularity of food courts in the country, the MB franchising model is quite popular and successful in the restaurant sector in India. This article covers a detailed description of why the MB franchise model is still not a popular trend among the Indian entrepreneurs in spite of its numerous advantages. As said by Kapil Prakash, Franchisee, MBO, NH-1 Factory Stores, “We are doing business from the last nine years. I entered into the franchising sector by taking up the franchise of Reebok and now I own other brands like Gini & Jony, Spykar, Numero Uno and many more. We are satisfied with the way our franchises are working and the way companies conduct their businesses. So, having a multi brand outlets is a very good experience.”
Factors favouring multi-brand franchising
Having a MBO is an ideal option to distribute the investment and lessen the risk of business failure or business loss. Moreover according to Vipin Kapoor, Managing Director, Kapsons Group, “Most Indian customers prefer to visit a MBO rather than an EBO as they feel more comfortable and at ease in the environment. It also saves time as the consumers have an array of products to choose from.” Below mentioned are few advantages of taking an MBO franchise:
Obstacles faced in running a MBO franchise
In spite of having many advantages, it has been witnessed that there are few franchisees who opt for this model. One of the valid reasons is that the concept is not so well-understood. A few other factors which have not allowed MBOs to gain momentum are as follows:
The obstacles mentioned can easily be overcome with hard work and proper running of the outlet to reap the benefits.
If you aspire to build your empire by opting for multi-brand franchise model, then you must own an already established franchised business. One must do a thorough research of the brands one is aspiring to take franchise of. As Young says, “Multi-brand groups most often are driven by the degree of success of the initial brand.”
To conclude it can be said that the MB franchising model has been a well proven strategy for most of the franchisees. It is a great business model that needs to be explored and practiced in order to grow with time but with a lot of dedication and hard work.