The advantages of franchising your brand name and products in another market
Franchising is a win-win situation for both the franchiser and the franchisee. The franchiser is the company or brand allowing its name to be used and the franchisee is the person who is purchasing the rights to use the brand name. For those of you who may not know what franchising is, it is a way by which a company or brand that is famous in another place allows an individual to purchase the rights to sell its products.
Franchising in a foreign market This is the best opportunity that a brand can get to test the waters in that particular market without having to fully commit. There are a lot of risks involved in setting up a retail outlet in a particular place even if you are a well known brand. Especially if you are a brand that is from another country, you may not have the proper knowledge of the customs and buying behavior of that new country that you are going to enter. For example, many companies that enter into foreign markets fail to sell and end up pulling out of the market.
Franchising to the rescue Instead of setting up an independent business in a foreign location, it would be more advisable to work out a franchising plan so as to connect with the people of that region. Many companies have experienced success a second time as a result of franchising. It is only after a few years of franchising that they come to know where they went wrong in their strategy. The franchiser receives money from the franchisee for using their brand name and the franchisee benefits through a good brand name and profits via the business.