When talking about the retail business, there are various types of businesses that are promising and you can choose. You can open your own business be it an online retail store (e-commerce) or a physical store with all the capital you have.
However, there are other options such as a franchise business that provides various benefits and opportunities for you.
According to the Indian Franchise Association, a franchise is a system of distributing goods or services to end customers with a franchisor that grants the right to individuals or companies to conduct business with brands, names, systems, procedures and ways that have been predetermined in the term specific time and area.
In this business, there are 2 parties involved, namely
- the franchisor (franchisor) as the party who owns, leases or sells the brand and a system.
- Franchise (franchisee) as the party that buys the brand and a business system from the franchisor on terms that have been mutually agreed upon.
Starting a business is indeed quite difficult and a strong intention is needed. Retail business owners do not have to come up with business ideas and plans, find locations, supply products, hire employees and carry out marketing strategies.
If you misstep can cause failure in business, you know! Starting a franchise business also has risks but has a higher chance of success compared to other businesses.
If you compare it to the individual or business start your own business, opening a franchise business or franchisee has a variety of rules, systems and require different skills.
Therefore, you need to know how the franchise works and the advantages and disadvantages of running this type of retail business. By buying this franchise business, there are several benefits that you can get.
1. Quickly Start a Business
By choosing a franchise business, you don’t need to bother making business proposals and marketing strategies.
In terms of planning, the franchise business is relatively short, you only need to run a system that has been run by the franchisor.
Usually, you only need to set up a place, and all business needs will be provided directly by the franchisor.
2. Having a Professional Partner
Franchisors or franchisees have automatically become business partners since you registered by buying or renting this business.
By having a professional partner, you no longer need to be confused about running a business. Usually, the franchisee will be ready to support your business and provide the various facilities that you need.
This is certainly for the sake of the development of your business and your partner (franchiser).
If the franchise that you choose has a good reputation and good business management, then this is also an advantage for you because the business idea, brand name and business management system must have been tested and live in your business.
3. No Need Branding
Products and business brands are usually already known to the wider community so you do not have to bother anymore doing branding on business brands.
The most important thing in this business is when you choose a business and determine who you will work with. Try to choose a franchise business that is well known and has a positive image in the community.
4. Full support
You don’t need to worry, usually, franchisors will provide specialized training to their partners. If you start this business, you will get training such as marketing strategy, financial management and how to run a business.
5. Free Media Promotion
By choosing a franchise business, you do not need to bother thinking about how to promote this business.
The franchisor must have thought of the right strategy to promote his business. Indirectly, you can also get free advertising media from the franchisor.
6. Easy Financial Management
Parties who will invest in your business (investors) will definitely prefer a business that is proven both financially and network marketing.
If you join a particular franchise business, of course, there is no need to bother anymore about the financial management system like a business that really starts something from scratch.
7. Running a Business Easily
Your franchise business will automatically influence the development of franchise businesses. That way, the franchisor really wants you to succeed and get a lot of benefits.
To support this, they will provide a proven management system that makes it easy for you to run a franchise business.
8. High Success Rate
When you start a business, of course, there is always a high risk for your business. There is always a potential loss that is gained.
What’s more, if you really don’t understand how a business can run. This is of course if it keeps happening your business will drop. With a franchise business, you don’t need to be afraid to fall.
All the support, management and brands that are known will reduce the risk of loss to your business.
9. Power of Franchisor Brand
The most important advantage for the entrepreneur in the franchising business model is to take advantage of the franchisor brand’s strategic identity and strength in the market.
To take advantage of the image of the brand that has proved its success and created an effective corporate identity; franchise is a very important advantage for the beneficiary.
Taking advantage of the franchise offered by a franchisor brand, which is recognized nationwide or worldwide, entrepreneurs must comply with the standards of the brand. This is a factor that creates trust for customers.
Therefore, customers, do not mind buying products or services of a brand they already know and love from your location. One of the most important advantages of this causal system is that the existing trust continues consistently.
10. Advertising and Promotional
Another aspect that is among the advantages of franchising is advertisement and promotion. To succeed, people who will make a new venture in today’s competitive conditions need to plan a serious advertising budget.
Because, even if the product or service offered is of high quality, it is difficult for the business to be successful unless it is introduced to the customers.
In the franchise system, franchisee entrepreneurs also benefit from the national or international advertising campaigns of the brand, where the concession right is used.
What the entrepreneur needs to do is only local advertising and marketing activities in the region where he is located.
11. Ease And Management
Procedures and bureaucratic procedures can be difficult and complicated for entrepreneurs who will open a private business for the first time.
However, in the franchising system, these procedures are easily completed within the framework of the guidance and standards of the brand that grants the concession.
Standard procedures are documented; training programs and strategies are clear. It is possible to communicate with other franchisees within the system and to make rapid progress by using their experience.
12. Reduced Costs
Perhaps the most striking point among the franchising advantages is the decrease in costs. Having many franchise points in the system means an important power in purchasing.
In this way, costs decrease and this means an increase in profitability.
Before a new product is released in the franchising system, it is tested at certain franchise points. In this way, the risk is minimized by placing the liked product on the market.
13. Education And Technology Supports
Brands that distribute franchises support companies that receive franchises in many subjects such as technology, training and accounting procedures.
Because the franchise brand wants the entrepreneur to whom it gives the privilege to be successful. This is an important advantage for entrepreneurs.