Advisory 2010-02-01

Partnering with budding franchisors

Success is guaranteed neither with a popular franchise nor with an evolving one. Often a franchisee has to go through the painful process of selecting the right franchise. Let us find out the pros and cons of taking up a franchise of an evolving business

By Sub Editor
Partnering with budding franchisors

Partnering with a popular and successful franchisor does not ensure definite success for a franchisee. Same is the case with an evolving franchise that is on its way to gain prominence in the market. Agreed that taking up a franchise of a popular brand provides umpteen benefits, but a franchise of an upcoming brand too has its own share of benefits. All aspiring franchisees undergo the dilemma of selecting a suitable franchise. If logic is applied then partnering with an experienced company is safer than partnering with a new franchisor. However, disqualifying a new franchise, for the sole reason of its being new, may mislead the franchisee into missing out on a lucrative opportunity.

Pros and cons of franchising for an evolving brand

Every coin has two sides. So does a franchise business. Let us discuss the pros and cons of being a franchisee of yet to be successful franchisor.


Undoubtedly, an established franchisor may give the franchisee a well-known brand name, which acts as a good start to a franchisee, training and support by the franchisor along with the security of an ensured break-even period. However, a new franchisor also has some advantages for the aspiring franchisee.

  • First mover’s advantage: The success of a first time franchisee is critical for the success of the any franchising company. Therefore, budding franchisors and their corporate staff generally devote more time, attention and support to their first franchisees. In this way franchisees get the first mover’s advantage and often get the most important position in the franchise network.
  • Gaining profits from a fresh concept: First franchisees benefit more from the fresh business concept of the franchisor. After sometime the unique concept may become stale and might reach its saturation point with lots of other companies following suit.
  • Being the master franchisee:  In a new franchise system, a franchisee can reap more benefits by taking the position of a master franchisee or an area developer. Moreover, he can open outlets at prime territories and localities. In an established system, existing franchisees may have already taken those prime locations, and you being the newcomer may not get the opportunity.
  • Flexibility of the franchisor: To encourage prospective franchisees to come on board, new franchisors are more flexible in terms of contract terms and fees. With the help of a franchise attorney you may be able to negotiate in your favour on many terms and conditions.
  • Taking initiatives for improvement: Being one of the first franchisees can lead to being in a position to recommend and initiate changes in the franchise system. New franchisors heed the advices of their franchisees and can implement the changes in the product or concept.
  • Complimentary offers: Being a partner of an establishing business may give you an opportunity to avail some complimentary offers from the franchisors in the form of discounts in investments and royalties.


Just like in any other business there are some negative aspects of taking up a franchise of an establishing franchisor.

  • More risk involved: Being a new company, the franchisor has no proven franchise profitability record. Therefore, as a franchisee you may be under a greater risk as compared to an established franchise company. Moreover you may not be able to carry out an extensive research about the concept and its competitors.
  • Being a guinea pig: A new franchisor without any prior experience of franchising can experiment all his ideas on his first franchisee. But that may not always be a feasible move, considering his ‘fresh’ status in the market.
  • Both are learners: For the first-time franchisee, who is a novice in franchising, partnering with a franchisor who is also new may not be a good experience. As both are learners and any loss would directly influence the business as well as their partnership. 
  • Difficulty in getting loans: It is more difficult to obtain business loans with a franchise company. Bank professionals and lenders may evaluate and deem your venture as too great a risk.

Although risks are there in being the franchisee of a new company, but it also has its own benefits. Being a franchisee is better than starting a business from scratch. Therefore to conclude, it can be said that being the franchisee of a new franchise company can also take you on a successful franchise journey.

star franchise india
Mohammad H Arif : 25, Dec 2009 at 07:42 AM
with a sizeable number of INDIAN urban populace touring different continents for pleasure or business/job and a very healthy economic growth forecasted to go up in the coming years the US or EUROPEAN model FOOD outlets are sure to make a mark in INDIAN market as they represent clean,trendy and hygenic way of relaxing. The youth of INDIA want to experience what they see in their much sought after FIRST WORLD electronic media - lets be a part of this dynamic change and I would be surely prefer to be a ENTEREPREUNER in this field sooner or later
RAVI KALE : 30, Apr 2015 at 07:25 PM
HI, this is ravi I want a franchising in my hometown Hadgaow dis: nanded
Related opportunities
  • Courier & Delivery
    About Us: We are an International Tele Shopping and Direct Selling..
    Locations looking for expansion Madhya pradesh
    Establishment year 2017
    Franchising Launch Date 2018
    Investment size Rs. 10000 - 50000
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Indore Madhya pradesh
  • Clinics & Nursing Homes
    §Our Vision is to provide the best health care assistance..
    Locations looking for expansion Delhi
    Establishment year 2019
    Franchising Launch Date 2020
    Investment size Rs. 5lac - 10lac
    Space required 300
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater New delhi Delhi
  • Courier & Delivery
    Locations looking for expansion Madhya pradesh
    Establishment year 2015
    Franchising Launch Date 2017
    Investment size Rs. 10000 - 50000
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Indore Madhya pradesh
  • Ayurvedic, Herbal & Organic Products
    Ayurved is a holistic medical stream that reflects the prevention..
    Locations looking for expansion Maharashtra
    Establishment year 2015
    Franchising Launch Date 2021
    Investment size Rs. 2lac - 5lac
    Space required 40
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Maval Maharashtra
Insta-Subscribe to
The Franchising World
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts

ads ads ads ads