Understanding the intricate details of the franchising business
The origin of franchising, as a business model, can be traced back to the late fifties and sixties. It was immensely popular during this particular period. It is in fact a traditional business model which means that there is a parent company overseeing the smaller businesses. An understanding of the different features of franchising is required before purchasing any business. The various features of franchising are as follows:
Features of franchising:
The franchisor usually offers services such as advertising and marketing to the franchisee. The franchisor also provides a detailed business plan, which is implemented successfully in other places or franchises. This detailed plan consists of a daily schedule or process of operation to be followed on a daily basis. This particular tried and tested formula is the major reason behind the popularity and success of franchising. For instance, the franchisee can obtain valuable information from the franchisor pertaining to the success and reasons behind the success of other franchising businesses. The parent company usually shows the path to be followed in order to emerge successful in the business. Detailed research is essential: Like any business approach, the franchising business also contains a certain degree of risk. After all, the eventual success or failure of the company depends upon you. Experts therefore recommend thorough research before entering into a franchising agreement. Some of the factors to be considered well in advance are as follows: • Market Leaders • Competition Analysis • Consumer demand in that particular category • Distribution Network • Legal formalities related to the franchising agreement Thus, it is advisable to be well prepared before conducting business via the franchising method but in the end it should be a rewarding and less risky way of conducting business.