There are many type of
businesses that you can own, you want to become an owner and control the things
on your own without any hurdle. You have so many options available in the world
to start your own business, from small business level to a larger scale.
But, in case you want to
own an already running and popular business because you do not want to face
loss at any cost. The only way is to do that is owning a franchise, now most of
the people have their own definitions about what is a franchise.
In order to explain the
proper definition of a franchise, let’s have a look on the following
definitions of the franchise.
- Franchise is a type of business
that is divided into different cities, the origin of all the division is the
one main branch. A franchise is easily recognizable because of the fact that
all the franchises no matter where ever they are, they have the same color,
signs and recognition.
- In other words one can say,
that a franchise is exactly the same anywhere it is. For example you go into
one city it is exactly the same in another city. The products that they are
offering are exactly the same, the representations, the design etc. of the
franchise is the same as anywhere else.
- If we take few of the popular
examples of the franchises then the names we come up with are KFC, Burger King,
and Subway etc. One can say that where ever they exist in the world the
standard, the signs and the product they are offering are the same. AN
individual can easily recognize them and hardly know that which one is the
origin of all the branches because all of them as considered as the same.
All of these statements
are absolutely correct and there is nothing wrong about these. There is a lot
more than that to a franchise, uniformity is not the only feature of a
franchise but there is more to it.
Franchise can be
describes as expansion of a business, it is basically a method of extension of
the original business. There is a licensing relationship between the original
shop and then the franchises. There is a distribution of good and services in
different areas. The power to sale and provide the services is given to the
franchises by the original ones.
In the method of
franchising, there is a term for the person or the company that distribute the
power of services to the third party, this procedure is done by the granting of
a license. The term that is used for that person or the company is known as the
franchisors. The third party that is granted license in order to carry on and
conduct the same business under their umbrella or mark is known as the
The franchisee is granted
a license for providing service and products, not only that but the franchisee
uses the same trade mark as the franchisor. The franchisee is also allowed to
provide them with an operating system, support and branding. By defining all
this one can draw a conclusion that franchise is a type of a business which
gives you a hope that you will not be facing loss. The reason behind it is that
it is an already established business and popular among people.
The best part about it
is that people want to have the same product available nearby them. Usually for
these type of products and services people can travel to long distances even,
which mean that if the same business is available nearby them they will definitely
go and purchase the products or avail the services. As a franchisee one is
allowed to operate the business individually but it branded and over looked by
the umbrella under which the franchisee is working or carrying on the business.
Usually multinational or
even the national companies do offer the franchises. There are many popular
stores and the restaurants that you observe on the daily basis, they offer
franchises. Taking the example of Pizza Hut, you ca see that it exists all over
the world. The reason behind it is that the Franchisors gave the power to the
franchisees to open the outlets in different areas of the world.
Whenever you decide to
buy a franchise the main reason behind it is that you do not want to go through
the hurdle of establishing the name first. The franchisor take the
responsibility of all the branding of the product and services. You are safe
under that umbrella because people are already aware off your business and
trust it. Because it takes hell of years to establish a brand, becoming a
popular name in the industry it is very difficult.
The people who do want
to go through all this can buy a franchise. When you make up your mind that you
are going to buy a franchise this means that you are buying the rights to open
the same type of business. You will be able to buy the rights to avail a proven
and trusted business system and model. This type of business comes with proven
price, all the marketing tactics and products.
You just further have to
sell the products and provide the service. The franchisors gives you all the
right to a brand, you are able to use their trademark which includes the logo,
signage and the slogans. Anything that has to do with the brand and is related
to that you will be having the right to avail it. But, you have to keep in mind
that there are terms and conditions that you have to sign.
Sometimes the brand you
choose might have their own different policies.
The procedure of becoming
After clarifying the whole concept of a franchise, you should
know the procedure that leads to becoming a franchisee. The common practice or
the procedure of becoming a franchisee is that you have to contact the
franchisors and first you need to know what they have to offer. You have to
know the terms and condition upon which they are offering you their brand and
making you a franchisee.
After knowing all that you will have to pay an up-front fee of
the franchise. When you pay that fee you are basically signing up for becoming
a franchisee and agreeing to all the agreement of the franchisor. The agreement
of the franchisor and the franchisee relationship has all of the following
terms included in it, you will have to take care of all these terms. The terms
are as follows:
- You are signing up to use
the name of the brand, you are agreeing to use their trademark and to work
under the umbrella of their name.
- You will be deciding the
system and operating of the business with the franchisor.
- The manual of operation
of carrying out the business a re been discussed and then properly signed as
- You will be aware of all
the material related to the marketing of the products or the services they have
- All the other proprietary
materials are been discussed.
In addition to all of
these terms and conditions that are very basic and common you will be given an
explanation of the geographical territory to cover. This will be basically mentioned
in the agreement that is going to be signed between the two. This agreement
will exclusively talk about the information regarding the territory.
The time period will be mentioned in it as well, which will explain the
duration of your franchise business. Typically, if we talk about the common
practice that is been practiced between the franchisors and franchisee is 5 to
It totally depends on your discretion that how long you want to carry out the
same business. But the normal duration of the contract is up to 10 years and
you can renew it if you want to afterwards.
What is the reason behind
companies franchising their business?
Franchising a business is a two way profit for both the
franchisor and the franchisee. It is basically not only beneficial for a
franchisee but for the company as well. It is not very complicate that how do
they get profit out of it, it is very simple. Franchising is a really
beneficial way for all the companies because it increases their distribution in
regard with the sale of the products or lending the services that they have to
offer. It definitely increases the sale of the products that they has to offer
especially in different areas of the world or the country.
For instance, if a company exists in one area and they do not
have the budget to open the same in some other area but the demand of their products
is high there. Then the only way they are left with franchising their business
which not helps the customers avail the services and products easily but is
also beneficial for the company and the franchisee.
In short the company is not using their own money to expand
their business to different areas of the world. It is a huge advantage for a
franchisor that the franchisee will pay the money to expand their business but
in short the company is getting the profit and the trust of the people in other
areas too. It also helps in building the customer base everywhere, making a
brad popular without any doubt.
They are getting to expand their business to the multiple new
locations, which reduces their financial risk. But, you should not assume that
only the company is going to benefit from it because the franchisor will still
have to invest the money in marketing, branding and also to keep on the system
of all the franchises.
The company is basically risking their business by putting their
trust in a franchisee and giving their whole business concept to them. So, it
is a two way process in which both of the franchisor and franchisee are taking
the risk in order to get the benefit out. Basically the franchising is a great
way to distribute the products and services at different level and scale. But
one thing that should be clarified is that all the Franchise
Security Companies are not created equal. You should be very vigilant
while you are choosing the brand and this business opportunity should be chosen
Franchising is a great product and service distribution method.
But, all franchises are not created equal. You must choose your business
How to determine that
what franchise you should invest in:
It can be really hectic in terms of which brandyou should choose
and which is going to be a success for you. It is a challenging process that
what you are going to choose for yourself. Sometimes you have so many options
in front of you that you get confused which one to go for. The reason is that
when you decide to start a business with hundreds of options in front of you,
everything looks like a success.
You feel like anything you are going to invest will be a success
because you are so motivated to carry on a business. But, do you really think
that only the motivator factor will lead you to success? With hundreds of
concepts and options available you should not just rely on the motivation
factor but play smart and choose wisely.
Here are few tips which can help you in choosing the best for
you. The tips are as follows:
out what you are best at:
You should always choose in life, whatever you are good at. The
things that make you feel like that yes this is my type of thing, I will be the
best doing it. This is exactly the same concept that you should follow in your
life, always choose the best for yourself. By saying that one can say that you
should buy a franchise that is of you niche and type, in short should be of
You should choose the franchise by matching it with your skills,
because your skills should always compliment your business. First you have to
make up your mind about what are your best possible skills, after that you are
going to make a list of your top skills. Basically, write down everything all
of your skills and the plan according to that.
For example, let’s say that your communication skills are
brilliant and you have an absolute trust that you can convince people. Maybe
you are too good at making customers with the use of your communication skills.
You should write that down as one of your skills. We can take an example of
another person who is not an outgoing person at all, this does not mean that
you are capable of doing anything at all. This means that you might be the best
business men by staying behind the scenes. In short whatever you are good at,
you can have all the skills written down.
There is an easy tip to o that which is the SWOT method, you can
apply this method on yourself and you will figure out almost everything about
yourself. The SWOT is defined as your strengths, weakness, opportunities and
threats. By explaining this method more you just have to define your strengths
first, which will lead you to examine what you are weak at maybe you can
improve that and apply it on your business.
By doing both of these when you know your strengths and
weaknesses you will know the opportunities you are available with. You will
automatically know that what you are good at. After that you can easily know
about the threats that you will have to face in the terms of your business. You
can take the threat as your competitors, you should know how you are going to
deal with all that.
your skills with the opportunities you have:
This is not complicated
at all, it is very simple method to apply on your franchise business. We can
here take an example that if you are good at something you should go for the
same type of business. By knowing you skills you can match the opportunities
with it as well. There are many options available according to your interest.
For instance, if you
were always interested in investigation and detective things then you can buy a
franchise according to that. You just do not have to go with the food and clothing’s
because the industry is more than that. The companies according to your
interest are also involved in franchising their business further.
You can start with searching
the opportunities online, you can start your research by only searching online.
There are many franchise portals that are there to help you out in this regard.
To can easily find your opportunitiesthere, you can use your favorite search
engine and then type your interest it will show up a lot of options for you.
should look for the trends:
You have to be focused
on the point that you must become a trend watcher. This means that you should
keep an eye on the business trends, you have to keep yourself updated with the
facts of the industryand the niche that you choose for yourself. You have to
keep an eye on the consumer rate of your franchise you are deciding to focus
on. You always have to stay a little ahead in the game to succeed, because it’s
not only you who is deciding to invest in that franchise.
You even have
competition in this regard as well, there are many people who are looking for
the same area as you. By this we mean
that you should not keep only one option, that of you do not get that opportunity
then you cannot do anything else. This is not the case you always have to keep
multiple options that you do not regret afterwards.
Sometimes it can happen that when you choose to invest in some
franchise it was trending, but afterwards it’s not the same. This will make you
regret all the investment, you should not get yourself stuck in such a
situation. You haveto choose a franchise that will never go out of fashions and
will be trending throughout when you are going to own it.
In order to do that you should do a complete and meaningful
research on the franchise that you are going to own. There are many thing that
matter but one of the most is the customer trust, if the consumers trust the
product and service of the franchise then nothing can stop you from getting the
what you have choose:
After choosing the
franchise you have to be focused on the point that your choice is right and you
can do it. Without all that you cannot motivate yourself to do anything else.
You do not have to do the marketing because this is on the shoulders of the franchisors.
You have to focus on the sale and providing the services to the customers.
Your main focus is your
customer base and you should be careful about the fact the franchisor are
depending upon you by giving you their name. It is your responsibility to be
more careful and vigilant in this regard. You should be working in such a way
that it enhance theirs and your reputation as an outlet. Success matter but it
comes with the reputation. If you have the consumer base you can achieve the success
in months, nothing can stop you the.
So, this was all about
everything you need to know about the franchise. You have all the tips if you
are thinking to buy one, or considering to start a franchising business.
These tips are helpful
in any business not only in the matter of franchise, but they are also applicable anywhere. Your niche does matter more, choosing
it wisely can help you a lot in your business. We hope this was helpful for you
in getting what a franchise is and how you can become a successful franchisee.