Why Franchise?
- Lower Cost Unlike employees, franchisees make an initial payment in return for becoming a part of your business and then they continue to pay you a percentage of their revenue, throughout the duration of their Franchise Agreement. ...
- Simpler Management ...
- Faster Expansion ...
- Better Market Penetration ...
- Greater Commitment ...
- Less Recruitment ...
- International Potential ...
What are the benefits of owning a franchise business?
The Pros Of Buying A Franchise
- Skipping Startup Stage. The most difficult part of owning a business arguably comes in the startup stage, where you have to write a business plan, conduct market research, create a ...
- Instant Name Recognition. ...
- Training Program. ...
- Help With Marketing And Advertising. ...
- Access To Increased Purchasing Power. ...
- Easier Access To Financing. ...
How to make your own franchise in 5 steps?
- Set Realistic Goals. Franchising is more of a marathon than a sprint. ...
- Research Your Competitors. ...
- Develop Your Franchise Offering for Both Individual and Multi-Unit Sales. ...
- Make Sure Your FDD Is Compliant for Every State. ...
- Learn Franchising and Get Involved in the Franchise Community. ...
What are the advantages and disadvantages of franchise business?
These include:
- Limited control: As a franchise business owner, you have limited control. ...
- Costs: Opening a franchise is not a cheap endeavor. ...
- Potential leadership changes: There is always the possibility that the franchise can be acquired and new leadership will move in.
- Lack of privacy: Being a franchisee also comes with a lack of financial privacy. ...
What are the advantages of starting a franchise?
- Long-term commitment. When a franchisee invests, it is difficult for her to leave the business.
- Better quality management. A franchisee becomes a long-term manager and continues to learn about the business and gains institutional knowledge about the business. ...
- Better operational quality. ...
- Innovation. ...
- Franchisees outperform managers. ...
What is franchisee responsibility?
Franchisees are themselves responsible for the day-to-day running of their business units and they must do this strictly in accordance with the Franchise Agreement and Operating Manual. As franchisees have invested their own hard-earned money, they do not require the detailed level of management which would be needed for employees. The objectives of the franchisee and of the franchising organisation are, therefore, very closely aligned, with the success of the one depending to a great extent on the success of the other. As a result, the franchise network requires only a simplified and relatively low-cost management system. This is typically based on the close monitoring by the franchisor of the key performance indicators (KPIs) and the provision of motivational leadership.
Why do franchisees invest in their business?
Franchisees have invested in their business and know that they can benefit directly from its success. Logically, for that reason, their commitment will be much greater than that of employees, who have made no such financial investment and are guaranteed to receive at least a basic wage at the end of each month, regardless of performance. However, money is not the only driving force for better performance. Since the business is their own, franchisees will take real pride in the service which they provide and will ceaselessly strive to exceed the expectations of their customers. This commitment will also reflect in their loyalty to the franchisor’s brand, because it is also the franchisee’s brand, and they are intent on building up a business which can be sold on for profit at some future date. Of course, not all potential franchisees are so strongly motivated – nor do all have the necessary ability to succeed – so the franchisor’s initial selection process must be rigorous.
What is the benefit of self-financing?
The benefit of self-financing business units and a simplified management structure as described above usually means that franchised networks can be expanded more quickly than company-run networks. Franchising is all about replicating a clear and successful business formula and, provided the franchisor is prepared to make a reasonable investment in marketing at national level, the brand can quickly be expanded nationwide. This will in turn generate increased sales volumes and stronger purchasing power, via which the organisation can command greater discounts from its suppliers.
What happens if you leave a franchise early?
If they leave prematurely they are unlikely to realise the full potential of their franchise investment and they may possibly lose everything.
Do franchisees make a payment?
Unlike employees, franchisees make an initial payment in return for becoming a part of your business and then they continue to pay you a percentage of their revenue, throughout the duration of their Franchise Agreement. This means that the costs of setting up the franchise, training staff and launching the business are all covered by the franchisee rather than by the parent organisation. Similarly, once the business is up and running, it is the franchisee who will be rewarding you with a monthly income, rather than being paid by you as an employee. For these reasons, the franchise system can provide a very cost-effective route for business development, but only provided that the original business is successful and that the franchisor is willing to invest sufficient time and money into creating an attractive franchise opportunity.
Do franchisees live within the territory?
They will generally live within the franchise territory, be known there and will be seen as having made a permanent commitment. These are all attributes which generally do not apply to company employees and will be of enormous value in helping franchisees to penetrate their local market.
Why is franchising important?
"Franchising has allowed us to do what we love while running our very own business! It gave us the opportunity to work for ourselves and to serve a real purpose, instead of just working on the things we do well for a boss.
What do you need to know when starting a business?
When you start your own business, you must learn all these things on your own, with 'rookie mistakes' part of the learning curve.
Is franchising a good idea?
Franchising is a great way to start a business when you want to work for yourself but have only a little idea on how to start it. Coming to America as war refugees, we knew hard work and a little leap of faith could get you far in life and franchising paved the path for us.".
Is opening a franchise easy?
Paving the way for a new business isn't easy. But what if you could have all the benefits of being an entrepreneur with the resources of a bigger company? Opening a franchise might just be the right path for you.
Who is Brittney Morgan?
Brittney Morgan. Business News Daily Staff. Brittney Q. Morgan is a Brooklyn-based writer and editor, as well as a graduate of Drew University, where she majored in History. Her work can be found all across the web at Apartment Therapy, HuffPost, and more.
Can you ask for help if you need it?
You can ask for help if you need it.
Can you work with friends and family?
You can work with friends and family.
Why is it important to provide services and products that other businesses will need and appreciate?
Providing services and products that other business will need and appreciate will enable you to gain stability as you establish your reputation in the market. As already mentioned switching service providers can lead to operational slowdowns and missed opportunities. Once they find a reliable partner, most B2B customers will form a long-term relationship.
Why is outsourcing important?
Apart from being cost-efficient, outsourcing also gives businesses access to quality equipment and the specialized knowledge of their partners.
Why is it important to work with other companies?
Working with other companies can be easier than marketing and selling directly to consumers. Businesses tend to have highly specific needs for particular products and services. As long as the quality is sufficient, they will prefer to continue working with the same service provider rather than accept the risks of a switch.
Can B2B be customized?
B2B services can be customized to address the needs of clients: when it comes to B2C product development, the same level of flexibility is difficult to achieve. As a B2B franchise business owner, you’ll get to work with both smaller and larger companies. You can easily develop a portfolio of services that will cater to the needs of all your clients and help you expand.
Is B2B marketing or sales driven?
According to a Forbes report, most B2C companies are marketing-driven and B2B companies are predominantly sales-driven. This is so because the majority of B2B companies deal with a small target group of customers that is extremely well defined right from the start. Corporate customers want to establish solid relationships with service providers and transactions could often be very large Develop strong relationships: most businesses require recurrent services from their partners. If you manage to provide stellar customer service, you’ll guarantee repeat customers and the stability of your company.
Lower Cost
- Unlike employees, franchisees make an initial payment in return for becoming a part of your business and then they continue to pay you a percentage of their revenue, throughout the duration of their Franchise Agreement. This means that the costs of setting up the franchise, training staff and launching the business are all covered by the franchisee...
Simpler Management
- Franchisees are themselves responsible for the day-to-day running of their business units and they must do this strictly in accordance with the Franchise Agreement and Operating Manual. As franchisees have invested their own hard-earned money, they do not require the detailed level of management which would be needed for employees. The objectives of the franchisee and of th…
Faster Expansion
- The benefit of self-financing business units and a simplified management structure as described above usually means that franchised networks can be expanded more quickly than company-run networks. Franchising is all about replicating a clear and successful business formula and, provided the franchisor is prepared to make a reasonable investment in marketing at national le…
Better Market Penetration
- Franchisees are normally well established as part of the local community, either on a personal level or as a result of their past business activities and are likely to be knowledgeable about the area. This can give them a very significant advantage in gaining new business for the franchise at a local level. They will generally live within the franchise territory, be known there and will be see…
Greater Commitment
- Franchisees have invested in their business and know that they can benefit directly from its success. Logically, for that reason, their commitment will be much greater than that of employees, who have made no such financial investment and are guaranteed to receive at least a basic wage at the end of each month, regardless of performance. However, money is not the only driving for…
Less Recruitment
- On purchasing their franchise, the franchisees are really taking a decision to stick with their chosen business for the long term. If they leave prematurely they are unlikely to realise the full potential of their franchise investment and they may possibly lose everything. Even when the time is right to sell, it is their own responsibility to find a suitable buyer. This means that the franchisi…
International Potential
- If you have longer-term aspirations to expand your business internationally, the franchise system again has many advantages. Using a system called Master Franchising, you can quickly and simply replicate the whole of the your UK franchise model in another country, leaving the Master Franchisee to adapt the model to the local market – its language, business customs and legal re…