Corporations can easily boost their profits and expand globally without too many risks, whether it comes to business plans or brand sales.
What it means to be successful with a franchise
There are numerous franchises on the market and this technique is used all across the world, whether it comes to McDonald’s (fast food restaurants) or Hyatt (hotels). Every franchise has two key elements – a franchisee and a franchisor. The franchisor sells his renowned brand, as well as the expertise. The franchisee starts a business under the same name and administers it. The franchisor’s benefits include the possibility to improve the profit and gain some extra reputation.
A lot of people believe that the franchisee’s main benefit is the low level of risk. Besides, it is also fairly simple due to the fact that they do not need a new business plan, not to mention about raising a new brand from scratch.
While this idea is quite old, it has been resurrected at the end of the twentieth century. In fact, in 1999, a new franchise was opening up at every few minutes across the world.
Starbucks represents yet another successful franchise. It was established in 1971. It had one location only. By 2006, it was available in close to 40 countries and had about 8,000 locations.
How to succeed with a franchise
You might be surprised by how many opportunities you have when it comes to becoming a franchisee. Obviously, you have to search, but also follow a few basic rules.
- Ensure a decent number of products, as well as a top notch quality in all the franchises you operate. This is the best way to come up with a stable and positive reputation.
- ”Installing” a new franchise close to an old one can lead to the cannibalisation of one of them. While it looks like a profitable idea, you should think about the consequences. One of the operations is very likely to die and lose the customers.
- Allow your franchises to obtain a high grade of independence. This is what makes the difference between a franchise, a passive investor and a conglomerate.
- Rely on experienced counsellors or lawyers when about to buy or sell a franchise. The key is to know the service in very small details.