Some companies actively use the franchise to develop their business and promote their product and brand in the world.
Let’s figure out “What is it?” the franchise and “Why is it needed?”.
A franchise is the right to apply a ready-made business model under certain conditions. The subject of business is the provision of services, the performance of works or the distribution of goods, the need for which is broad and extraterritorial. This ensures the popularity of the business anywhere. The business model can be filled with instructions for performing certain operations. The owners (sellers) of the franchise ensure the quality of the presentation of their business in a new part of the world and make demands on the franchise buyers, most often of a material and technical nature. Business owners can retain control over the execution of certain operations. All this makes it possible to develop an international business with the help of people with different levels of education and management skills.
Do the franchisees become the founders of their business? No. Despite the fact that they bought a franchise, they are performers in the global chain of points of business of this brand. A franchise is an entrance ticket for the right to work with an international corporation, after paying for which information, instructions and the opportunity to receive trading revenue in the segment of this corporation’s activities will be given.
Not every activity can be put on a franchise. The more specialized and narrower the activity segment, the more complex the audience of consumption of the product of this activity, the less likely this type of activity is to put on a franchise. This applies to all types of creative, intellectual, inventive activities, where the main resource is human capital, and the basis of the created product is the creative and mental potential of the direct performers of this business. According to the franchise, you can build houses (of a certain type, size, etc.), but you cannot draw outstanding paintings, because there can only be one masterpiece.
Is it necessary to carry out business planning when buying a franchise? Sure. The structure of the business plan includes the cost and conditions of this franchise. Such business plans are much smaller in comparison with business development models from scratch.
In the planning of a franchise business, first of all, emphasis is placed on the locality and territory of the planned business, the potential customer flow is evaluated. Some franchise sellers perform such assessments that it will be important to check.