Features of franchising schemes Automatic translate

Franchising is a special form of organization and business in which the franchisor (company owner) transfers the right to sell services and goods to another company (franchisee) for a fixed fee. The scheme is promising, convenient, and will be of interest to both parties.

Each franchise on businessmens is a ready-made scheme for doing business. By choosing this option, the franchisee receives a scheme proven in practice, which will provide a stable income, subject to compliance with the points from the business book, and does not require time for promotion or advertising. Conditions, prices, restrictions depend on the specific franchisor. Therefore, before choosing, carefully study the market and compare different offers.

Advantages of franchising schemes

A business franchise provides the following benefits:

• Ready plan. The owner of the company provides partners with step-by-step guidance on building a business and achieving their goals.
• A well-known name that does not require advertising. Typically, franchisors are large companies that have a proven reputation and have won the trust of their target audience. Even when a brand is known in one region, a successful network can be developed in the future.
• Ready design. The franchisee purchases a brand book in the kit, which indicates the corporate identity of the brand. That is, a strategy for competent positioning comes as part of the package.
• Advertising. The partner receives all billboards, videos, leaflets. This saves time, money, and allows you to earn money immediately after launch without long promotion.
• Suppliers. With a franchise, you will receive a list of product suppliers with whom cooperation schemes have already been established.
• Ready standards. To organize the work you need to follow the instructions. If you have any questions, you can contact the franchisor.

The franchisee receives assistance in selecting employees and training them. But conditions may vary, so please check for details.

Are there any disadvantages?

The scheme has certain nuances that you need to know about before purchasing. So you won’t be able to change suppliers at will. Most franchises do not provide the opportunity to change importers and contractors. The agreement strictly regulates cooperation schemes, and the supplier of the owner company does not always offer the most favorable terms of delivery.

The franchisor sets uniform prices for the network of enterprises. Accordingly, you will not be able to make promotions and discounts or raise the cost of goods to increase earnings. These issues always need to be agreed upon; the franchisor rarely agrees to a meeting. Be prepared for additional payments, since when purchasing a franchise you are not purchasing a business, but renting a ready-made scheme. You need to pay a one-time lump sum plus monthly royalties. Some agreements require an additional advertising fee.

Franchising has its own risks. The business model limits freedom of action and does not protect against loss of funds when collaborating with an unverified seller. Therefore, it is better to overpay and settle on the offer of a well-known network than to save at the start and end up losing everything. As for strict boundaries, be tolerant of them, perceive them as protection from failure.

Types of Franchising

Today, production, product, and service franchising schemes are in demand. So you can choose not only the direction, segment, but also the type of services. There are mixed options - for example, trade and service, when the company sells air conditioners and provides installation services.

Forms – direct, reverse franchising, master franchise, subfranchising. They vary in implementation patterns and scale.