The Net wave in Franchising

A summary of how the Internet is affecting the Franchisee business

As the reach of the internet increases, there is greater scope for brand building online. Franchisors as well as local franchisees are taking this opportunity to increase awareness as well as sales. So if you don’t want to miss out on this latest business opportunity, we have a few but very important points for you.

• Brand building Online The rate at which the internet is growing, it is definitely going to be the epicenter of communication in the future. Hence in order to grow one’s business it is very important to be visible online. Many franchisors are creating their own websites in order to create awareness and increase recall. Some have also started internet advertising. Also unlike print, the internet provides the franchisor an opportunity to not only to communicate but also deliver a complete experience E.g. To take the user on a virtual tour of a factory or to allow him to customize his product

• Selling online A number of franchisors and franchisees are using their websites to sell their products directly to the customers. The internet is proving to be a great tool for Business-to-Consumer transactions. This has helped greatly in increasing company sales.  Due to the internets growing reach such a website can prove to be a great investment for the future.

• Creating a supply chain Some franchisors are using their websites to directly source raw materials from multiple sellers. Such Business-to-Business websites are giving the franchisors access to a wider supply base and also helping them in procuring raw materials at competitive prices.

• Conflicts The internet has also led to a conflict between the franchisor and the franchisee because of the cannibalization of sales. A B-2-C website by the franchisor can lead to loss of revenue for a local franchisee while multiple websites by franchisees can lead to brand distortion and multiple identities for the franchisors brand.

These are some of the opportunities as well as the threats posed by the emergence of the internet. So one should look to cash in on the opportunity it presents for his/her business but also be mindful of the conflicts it can give rise to.