Most franchise companies have their roots in pretty simple business concepts that are brought to life by hard working, focused entrepreneurs at the helm of the ship. Without that entrepreneur's cash, blood, sweat equity, and tears, the business would not
THE entrepreneur feels a deep sense of contentment with the effect of their hard work, but being human, they are destined to want more than to count cash after 10 hours of dealing with customers, employees, teething problems which comes with running any business. Work is work no matter how you dissect it, and even the most enjoyable aspects of dishing out curries, training students, or refilling cartridges leave the entrepreneur open to change after five, ten, fifteen, or twenty years of repetition. In the minds of many successful business owners a tune begins to play that goes something like this: "I have figured out how to make a success of this business; I have done what others have failed to do. I know how to avoid failure and I can show others the way. Hey, maybe I should franchise." The seed is planted, and now it waits to be watered.
Besides numerous benefits to count upon, franchising always has a definite edge over other modes of expansion. The following shows the areas where the franchising is in more advantageous position:
= Franchising ensures faster expansion in comparison to opening one-at-a-time at new locations.
= Also, the bulk purchasing of products, furnishings, advertising and promotional materials for the primary businesses and new franchises curtail the expenditure.
= A company that franchises experiences better business image in terms of credibility, professionalism and acceptability.
= Franchising is the interest-free investment for expansion that requires lower capital outlay and liabilities.
= No risk of increasing human resource since paying the employees for new locations will be sole responsibility of the franchisees.
= Better business operation in new locations as a franchisee who owns the business will give their best through sincere involvement.
It is not necessary to be unique and large to franchise examples are plenty. In education segment franchise is a well accepted business model that hardly offers any uniqueness. Also, numerous business houses started small only to grow big through franchising. The business enterprises like VLCC, VETA, EuroKids, Jumbo King, Reebok, Ferns N Petals, which grew from scratch, vouch for the effectiveness of franchising.
Are you ready to take the plunge?
Prior to opting for franchise, a company should make a thorough evaluation of the following criteria:
= Your brand in terms of products/services should enjoy a wide appeal
= The products or services that your company offers should enjoy lasting demand
= The products or services of your company should have a well defined USP that makes the products/services stand out among the rest.
= The business operation of your company should be easy-to-manage and e mulate for the franchisees. If it requires too much of specialized skill despite training support, the franchise model will not fit the bill for the average business investors.
= Your company should be operational for considerable time to project cash flow and profit margins for potential franchisees. As a support to its franchisees, a franchisor should have strong resources to sustain a new project and business development.
= Your company should be capable to sustain the time period prior to break even by the franchisees.
= The franchise opportunity has to be affordable for greater expansion for this will draw a large number of business investors who want rapid ROI.
Franchise offers flexibility in changing situation, Depending on the situations, franchise opportunities vary in terms of products and services. But, in the face value it is preferable to meet the conditions discussed above. However, franchising does offer flexibility to fit in a revised situation after some modifications to the benefits of both the franchisor and franchisees.
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