Franchising is nothing more or less than a business strategy for getting and keeping customers. It is a marketing system for creating an image in the minds of customers about the company's products or services. Franchising creates distribution network of interdependent business relationships that allows a number of people to share a brand identification, a successful method of doing business, and a strong marketing and distribution system.
Safety
For the franchisee, franchising is about risk reduction and safety. You give up the total freedom associated with being an "independent owner" to become part of a group of people committed to building a brand and dominating markets using a common, tested operating system. You don't have to guess about the most effective way to build your business, there is a specific system to use.
Proven Systems
The franchisor provides a proven method of doing business, a brand or trademark that will build in value in the eyes of the customer based on the faithful execution of the operating system. Initial and ongoing training support so you won't have to reinvent the wheel to be successful. You provide capital to expand the brand faster than the franchisor can by itself and you provide the management talent to run the business and execute the proven operating system.
Predictable Results
A franchise system should also provide:
group buying power to cut your operating expenses,
faster growth due to tested and proven marketing programs,
predictable results based on your adherence to the operating system
less risk of your invested capital.
The trade offs for you are the fees you pay the franchisor for the operating license and the restrictions you will deal with on the method of operating the business.
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