A Pilot Franchise and its advantages

What should one do, when he/she has a great business idea which he/she thinks will work wonderfully through franchising? Nothing, because after all it’s just an idea and not a business model, Right? No, wrong! In such a case a pilot franchise is the answer. A pilot franchise is basically a franchise, where the franchisor opens and runs his first outlet himself. Pilot franchising has many advantages, let’s have a look at some of the major advantages of pilot franchising

• Turn an idea into a business model A pilot franchise provides one with the perfect opportunity to turn a good idea into a great business model. In order to sell your business, it’s very important to have a business model, because no prospective franchisee will invest their money in an idea but many will invest in a developed business model. Hence a pilot franchise gives one a great opportunity to turn an idea into a business model.

• Test the Feasibility A pilot franchise also gives one a great opportunity to test the feasibility and viability of the business model. If a pilot franchise can be run successfully over a long period of time with a continuous growth in business, then the model may be fit for franchising.

• Iron out flaws Also a pilot franchise lets the franchisor iron out as many flaws as possible in the business model, before he starts franchising his business. A pilot franchise will help the franchisor fine-tune various aspects of his business such as production, finance, distribution, advertising etc. this phase will be the learning curve for the franchisor.

• Continuing Market Research A pilot franchise also acts as a permanent ground for doing market research. Since you own the store, you can experiment with various new products lines and also provide varied product offerings. You can constantly use statistical data to analyze consumer preferences, habits and taste. Also in a pilot franchise one can also determine the seasonal variation in demand. Hence it acts as a permanent base for market research.

• Good Advertisement A successful and a well run franchisee is the perfect advertisement for future franchisees. One can use sales figure from the store to entice aspiring franchisees. Also one can invite aspiring franchisees to visit the store and get first hand information about the work culture, customer response, brand image, brand feel etc. A visit to the store is the best way to impress a future franchisee.