Top 10 Advantages Of Franchising
Franchising is one of the most rapidly growing sectors in an economy due to the countless benefits it offers to the primary stakeholders involved. Some of the primary advantages of franchising of an enterprise can be briefly explained as follows:
1. The franchisee possesses the incentive of owning and managing a business along with the additional benefit of constant guidance from the franchisor. 2. The franchisee acquires an already established business with a brand image and a product line that customers are familiar with. 3. The franchisee has the added benefit of obtaining training from a franchisor who is already a tried and tested hand in the business. 4. The capital required for setting up a franchise enterprise is much lesser than the capital required towards establishing an own business. 5. There are better possibilities of obtaining financial aid for franchised enterprises than normal businesses since the risk is divided between various stakeholders. 6. A franchise enterprise has access to all the trading locations, layouts and the zoning laws already obtained by the existing brand. 7. This enterprise also benefits from the marketing and advertising activities of the already existing business as the new franchise enterprise can implement similar programs at minimal costs. 8. The franchisee can utilize the specialized and the highly skilled knowledge and expertise possessed by the franchisor’s organization while retaining their individuality by adding their innovative touches to the enterprise. 9. The research and development already carried out in that field can help the newly formed organization reach greater heights in shorter periods of time when compared to a newly established business. 10. Market intelligence available on the competition helps a franchisee to implement new strategies that will effectively address existing issues.
This invaluable information available to a franchisee in a franchise relationship gives it an important edge over other newly acquired or established businesses as franchisees can effectively address business challenges and build up the brand of the product successfully in various markets and in different conditions.