Franchising – is a very convenient way to start a business. In fact, do not have to create anything from scratch – from novice businessman in his hands and is already well-known brand, and proven technologies, and even finished version of clearance.
Among the advantages of franchising are the following:
1) Business does not start from scratch. Provision has promoted brand can save you time in the promotion (up to five years). But we know that the new business is most vulnerable is at the very beginning, when there was not fame and became recognizable. So, according to statistics, a significant proportion of new businesses is dying in the first year or two. It is this critical period and manage “slip” by buying a franchise.
2) There is no need to invent its own special technology – with the purchase of the franchise passed already developed system, and which should be used without departing – otherwise it will be something different than the standard sold to you. For example, the provision of rent business apartments for rent on the basis of a franchise, the franchisee will operate under the brand already known, it can be provided for the beginning of the site and all the achievements of the franchisor. Thus, for example, the cost of an apartment per day should not differ from the prices recommended by the franchisor, as well as the standard design apartments, surrendering the day, and their proficiency.
Franchising in rental apartments – no nonsense
3) The advantages include streamlined receipt of raw materials / components / accessories and ready market for the goods / services. No need to look for suppliers / partners. Commodity prices tend to be lower than if it had to buy it on their own – triggered mechanism of wholesale deliveries of bulk (because purchased a standard set for the entire network). As there is already ready contingent of consumers / customers who have chosen this brand. So it is only “keep the brand”, so as not to scare off a buyer of goods / services (otherwise the franchise will have to say goodbye – the franchisor will not suffer shame for his business because of the inaccuracy of the franchisee).
4) Training and assistance. If you create a new business has to get the whole experience yourself, then for the franchisee training and already provided enough detailed instructions. It is an ideal way for people who want to work in the system, rather than aspiring to something completely new.
However, franchising is not because of some advantages.
Although some of its shortcomings – it is only a continuation of its merits.
1) A rigid connection with the franchisor. Franchisee – a copy or shadow of the franchisor. With significant troubles core businesses are dying and “slips”. Furthermore, precisely because of the tight coupling of business may be lost at any deviations in its custody by the franchisee: the franchisor may simply not renew the franchise.
2) Investments. To purchase a franchise requires money – the so-called lump-sum payment. In addition, all the time as long as the franchise to the franchisor are permanent deductions – royalty. And they, in general, do not change regardless of how things. It is assumed that all should be well with the franchisee, because functional brand and brings considerable income. And if something does not work – then it’s trouble a beginner, make mistakes, despite the training. Although in deed, in the interests of the franchisor, not the franchisee to select all the income, but on the contrary, to give him the opportunity to earn and thrive. After all, when things are going well at the franchisees come from his receipt of revenues and the franchisor.
Recognizable brand world-famous franchise
3) Another drawback – the flip side of dignity. Activities already registered templates can be good, but as conditions change could be disastrous – just when it is necessary to change quickly, templates can ruin everything. That is, when changes can be literally between the millstones of the requirements of the franchisor and the current difficult situation on the market of goods / services. For example, by reducing the flow of tourists and the number living in Kiev queries, maintenance of high prices on display franchisorfor daily rent apartments from company “Arenda Group”, will definitely not be the best, especially to pay for public servants, if necessary. At this time, renting an apartment in Kiev – low prices would have been much more effective. On the other hand, can change for the better and the franchisee will receive additional benefits and preferences with the reasoned explanation of the situation on the part of the franchisee, the franchisor’s main policy.
Thus, everyone decides for himself – to open a new business or buying a franchise. And he and the other option has its advantages and disadvantages, and first of all it depends on the characteristics of human nature, his finances, ambitions and preferences. But always keep in mind that the franchise is now developing very rapidly, and a good business niche will not be empty for a long time, so give up the possibility of the development by the franchisor is not necessary.
