Business Case Studies
Posted 06 Aug 2019, Editor's Desk
Franchise is one of the easiest and fastest ways of expanding a business. If you want to know how to build a successful franchise business, you need to first clear about different franchise business models.
Once you are clear with the franchise business model, you can look forward to investing your money in an established brand or even can set up your own franchise chain.
Before getting into the details of how to build a successful franchise business, let us first understand why businessmen are more interested in expanding their business through franchise business.
There are many advantages as well as disadvantages in the franchise business.
Let us first discuss what makes a franchise successful.
Advantages of Franchise Business
1. In this business, you get a proven trademark, logo and an established brand name.
2. An established working business model.
3. You get the customer’s ready footfall.
4. Everything is already defined be it the content, context, training, or print.
5. A system to train your manpower.
6. In some brands, you also get the support of the national marketing team as well. This saves the investment of your extra money and time because the marketing is done by the team for you.
If you want to know how to build a successful franchise business, then you should understand that taking up the franchise of an established and popular brand will cost you a lot. You have to invest a good amount of money.
On the other hand, if you start your own burger shop the cost reduces to almost 10% and the profit also increases.
There are several franchisors that will give you their own infrastructure, software, database, and computer but in return, they will:
All they are interested in is royalty.
2. Lack of Flexibility
Do you want to jump into a business where the possibility of bringing in some other product becomes zero?
Big brands standardize their processes and products as this is what makes a franchise successful. However, this restricts the franchisee.
The bigger the brand the stricter will be their rules and norms because they already have a large customer base.
So, choose wisely before you join hands with someone for kick-starting a successful franchise business.
3. Thorough Research
Thorough research of the brand whose franchise you want to take is one of the important factors of how to build a successful franchise business.
If you are willing to take the franchise of a brand, then do check that what it's market status is because your brand will also be known with the parent brand.
If your parent brand is not going well in the market, your reputation will also be hampered irrespective of the efforts and money you invest in it.
1. Gap between what they expected and what is deliverable.
2. Gap between commitment and achievement.
3. Support from the company.
The above points are the factors that make a franchise successful.
4. Check the Failure Rate
Now after meeting the existing franchisees, you must go and search for some of the franchisees who have been shut down.
5. Franchisor Controls all the Cards
After finalizing the brand you want to work with, the documentation is the next most important part of how to build a successful franchise business.
6. Consider Doing it Yourself
It is true that joining with a big brand will give you big business and will demand big investment but on the other hand, sometimes things can go well for your brand as well.
Who knows the brand you built that is low on business and investment could boom up and become a bigger brand.
|Business is not rocket science; it needs possibility, passion, a business mindset, and some analytical ability.|