Amplifying the business prospects to exponential level is the mission for every organization. Who doesn’t want to have a flourishing business but you need to be aware about the orderliness with which it is done!
Franchising is one of those methods that can multiply your business system through efficient training and qualified franchise partners or franchisee. Legally said, franchising is a kind of business relationship where the franchiser provides license to the franchisee (that could be an individual or a group) over the trade name and the operational system of the organization where the franchisee agrees to conduct business according to the pre-defined terms and conditions. These trends are readily seen in colleges, beauty clinics, service-based firms and even some of the top preschools in India these days.
What does a franchisee gain other than him being a part of the trade name?
The franchiser supports the franchisee in running the business but along with that it exercises some control over the operations and supervises whether the franchisee is working under the specified terms. To gain a franchise, the franchisee has to pay a one-time fees or the franchise fee and the royalty fee for taking up the name of the established business. But, the franchiser has no role to play in the daily management of the business and does not operate jointly with the franchiser. The franchisee has the right to choose his staff, setup his infrastructure and schedules on his own.
Let us have a look as to how a franchising could be beneficial for an organisation.
- Expansion without any niche: This is one of the supreme benefits of franchising your business as a franchised business could expand swiftly rather a networked one. This is because it is just a clear replication of an already established business thus, a known business is easily accepted by the customers around. The franchisor need not to make any huge investments to set up a franchise.
- Pre- built Market share: The products and services of the company are already market tested and have a better position in the market. Thus, the market share of the organization is already known and will not take much efforts from the franchisee’s side.
- Huge success in short time: Many franchise schools in India or reputed salons, departmental stores have seen the effect of getting on-board with an established business. The name that they carry makes it easier for the franchised one to gain the same. Thus, time that seems a major factor for the businesses, can be saved tremendously when they are operating with a franchise setup. The market value of a business is very short-lived in some businesses and a timely expansion can reap your huge benefits.
- Cost factor: It saves a cost from the franchisor’s side as the construction or the setup of the infrastructure is done through the capital provided by the franchisee. Thus, for a franchisor the capital investment is not a point to worry about. This allows the franchisors to bring in investors who hold a partnership in the development of the new site.
- Good Competition ahead: When you are pooling franchisee, then you get to hold some leverage over your competitors in the market which values much more than just an independent business could.
- Management in ease: When you are a franchisee, then you should be rest assured regarding the training and other operational essentials that would be required by you to run the business. The franchisor is responsible for the training that he provides your staff with a follow-up manual that their business works upon.
- Adds reputation: For a franchisee, being a part of a big name is definitely an icing on the cake for him. He is a part of an already established and successful business that will get him accolades wherever he goes. Franchisees can see a huge benefit in the potential of the business if an international collaboration is in the future of the organization.
- No hassles with recruitment: When you are selling the franchise to the franchisee, then you are in no obligation to recruit a staff for it. This responsibility of hiring employees for the franchise falls under the supervision of franchisee himself. He will bring along his own workforce that will get under the routine work of your organization.