Business Franchise: What You Need To Know

An entrepreneur has many business propositions to choose from, to become the master of his own destiny. The prospective uncertainties underlying any new business venture, makes a secure future seem difficult, if not impossible. So, starting one’s own business might not prove as profitable, as opting for a business franchise for a large established company. This article elucidates why large companies offer franchises and the advantages an entrepreneur incurs in opting for such a business plan.

Some of the reasons why well established companies offer franchises are:

• To capture market share

• To have a wider customer-base

• To become the majority player in an aggressive market

• To expand their commercial activities

• To create an awareness of their brand amongst consumers

• To penetrate hitherto unknown markets

• To put in place an interactive environment of information-sharing

There are many advantages of opting for a business franchise. Setting up a franchise is easy due to the support from the parent company. The entrepreneur:

• Uses a proven business model, which ensures success, and so failure rates are low

• Gets enormous promotional support

• Can avail of superior management systems

• Receives ample administration support

• Is able to access ongoing training programs

• Receives help for meeting initial financing needs

• Acquires bulk purchasing power

• Captures greater market share due to the already established brand image

• Is privy to already well researched marketing tools.

• Receives development assistance

• Can avail of latest technological advancement in the relevant field

• Receives continuous assistance in brand-building

• Gets trouble-shooting guidance

• Builds up on an existing knowledge-base

The entrepreneur need not pay exorbitantly for this. He needs to give a specified licensing fee, depending on the government rules and regulations, specific to the country, in which the franchise is being taken. It also charges a monthly fixed or variable operating fee, as will be agreed upon, befitting the business plan of the parent company.

The entrepreneur works under a parent company and can make use of established business ideas. It is very interesting to note that at the same time, he can also take independent decisions, suited to his own commercial enterprise. So in this competitive corporate world, it makes sense for an individual, to choose a successful franchise business, instead of trying to run a stand-alone business with no guarantee of success.