Advisory Jun, 12 2015

Why is an established brand always better for franchisees?

Do you know what big thinkers do? They create powerful ideas to process it up with finesse and come out successfully. Well here is the glimpse to why it is always better to opt for franchise of bigger brands than start ups.

By Yamini S Verma, TFW Bureau
Sr. Sub-editor
Why is an established brand always better for franchisees?

It is always seen that a potential investor or an aspiring franchisee, will take up a franchise of a recognisable brand name. People always relate franchising with renowned chains including McDonald’s, KFC, Domino’s, SUBWAY, Pizza Hut as one can find these brands easily anywhere they go.

Why franchising?

India with little or almost no franchising laws has opened gateway for many foreign brands to foray and expand their businesses. Striving for success in any business is best enrouted via franchising business model of any successful or established brand. Reason being, the established or bigger brand holds the track record of success in the market with strong presence. The established brand also supports its franchisees via regular training programmes and assists them in managing the day-to-day store operations effectively. Talking about the proven business model for expansion, Sudeesh Varma of Green Gold Animation Pvt Ltd says: “Franchising is still at very nascent stage in India. The face value of the brand means a lot to get associated with the franchisees. Mutual co-operation and hard work is required by franchisor and the franchisee to make the venture a win- win situation for both of them.”

Think big!

The thought of starting any business brings along with itself, the defensive thought of failure, rejection and disapprovals. But industry experts or the big thinkers reciprocates the franchise tie up with success, acceptance and approvals. On a positive note, KVS Seshasai, Chief Executive Officer, Zee Learn Limited says: “Strong overall support! This is what an established franchisor brings as value to the franchisee. From sharing of best practices derived from years of experience to providing knowledge, know-how and solutions – an established franchisor can truly help a new investor (franchisee) get faster and higher returns on his or her investment. Another added advantage of an established franchisor is the massive economies of scale that it can bring for someone setting up a new business. This is why brands like Kidzee or Mount Litera Zee School are so popular as the potential partners understand the fantastic value that these established brands bring and what is even more important is that this value is easily demonstrable through the innumerable success stories of current partners.”

Take a quick look below at the key points which guides why an established brand is always better than a start up for franchisees.

  • Risk avoidance: An investor buying a franchise of a bigger brand will always be at a much lower level of risk as the brand in itself has established its name in the market with a set percentage of loyal consumers.
  • Experience matters:  Bigger the brand means holding more experience to run the business successfully. An established brand will always do its homework of survey before launching itself at a new location. Also the bigger brands will provide regular training and support to franchisees or investors than any startup.
  • Funding option: Strong support to capital needs will always be offered by an established brand. The bigger franchisor will always help its franchisees in getting the funds, loans and subsidies to commence and run the business successfully.
  • Strong Marketing and PR: Being a part of a big-name, franchise brand will always benefit the franchisee with right marketing and PR support on a national and regional front.

Related: Coordination: Mantra to Franchise Success

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