Many times the CoCo model works well when it comes to authentic food or consumer durable options as a business investment.
Sometimes, the Company Owned Company Organised franchise businesses are better run. These are primarily run by the franchisor itself and a franchise partner only puts in a stake in the property. The best part is that the franchise gets a guaranteed return and does not have to engage in its daily running.
The only thing required is an investment. CoCo actually offers franchisees the unique opportunity to profit from an established and well-loved brand.
How it Works
Ralph Messetti, a franchise business consultant says, “Advantage of this model is that every process is followed closely. No false commitment is done. The customer gets a first-hand experience with the retail chain.”
This a model where the owner of the brand or service wants to ensure the same message is going across his or her branches. Such owners don’t wish to make any false promises to their customers and are not open to any experimenting or deviation from their predefined model or product definition.
What is the USP
In this model, a particular revenue is a must to make the store self-sustained. So, the location factor becomes very important and thus an increase in rent. Often it has been seen that despite the lack of profit it kept running, otherwise brand will have a bad name on account of closure of the store.
Gaurav Mehra, Director, The Trial Box shares his philosophy behind why he does not buy the idea of a complete franchise of his unique food venture. “Ours is an experiment based on complete food experience. It is definitely a model which can be replicated. But that will take a long time because there is a secret to perfecting the taste as it is of things and a variety of options we provide. For me, the Company Owned, Company Run model works best.”
Staff is the Asset
In this model, the store is looked after by staff trained by the parent company only. Also, the company will take care of capex (say renovation cost, interior, layout, hardware, infrastructure, furniture and fixture, ceiling and flooring, glass door) plus operations cost (salary, electricity, store maintenance, telephone expenses, pilferage etc).
So in totality, the franchisee partner only has control over the money he invests and he or she can enjoy guaranteed returns.
For one, you get to own a business without having the headache to run it. In most cases, the parent company signs a bond of trust where they offer a guaranteed return on investment and guaranteed profit returns as well. Therefore, there is calculated risk involved. You are also free to manage the training and innovation part. However, you can choose to help the parent company to advertise or market the service or product after having fully understood the ethos of it.