Franchising System

Franchising is the way of doing business but not actually business. Franchise system is the most dynamic and progressive business sectors in the economy and it's a way of doing business in a very recognized and in a reputable way. Actually, strategic franchise system is a franchise consulting firm that focuses on the development and implementation of cost effective franchise lead generation for new and existing franchisors.

There are lots of benefits of becoming Franchisee because Franchising is one of the fastest-growing sectors of the economy.

Advantages of Franchising System are:

  • Detailed training provided to the Franchisors
  • Pilot operations and buying powers will have eliminated unnecessary expenses of Franchisee so they need less capital while setting up their business independently.
  • The Franchisors helps the Franchisee to identify suitable trading locations or operating territories.
  • The Franchisor helps the Franchisee in many ways like to obtain occupation rights to the trading location, prepare plans for layouts, comply with zoning or planning laws, they also provide general assistance in calculating the correct level and mix of stock for the opening launch of the business.
  • Training regarding all areas of the business such as manufacture, preparation, accounting, business controls, merchandising, marketing and promotion are given by the Franchisor to the Franchisee.
  • Better rates for finance or more favorable conditions were negotiated by the Franchisor to the Franchisees with financial institutions.
  • The franchisees are having high purchasing power and negotiating capacity because of the increasing franchised network.
  • A Franchise system greatly reduces a Franchisee’s business risks by providing the support and benefits.
  • The field operational staff of the Franchisor provides the services to the Franchisee, to assists with any problems which may arise during the time of business.
  • The Franchisor’s continuous research and development programs provide the benefits to the Franchisee, which are designed to improve the business and keep it up-to-date with latest information.
  • The franchisors based on their own experiences provide knowledge to their franchisees.
  • The Franchise can protect the Franchisee from the competition by defining territories of operation.

Now a day's franchise system dealing with various type of business category with varying levels of complexity and cost.

Potential franchisees have to do lot of things while purchasing franchise such as:

  • By reading the Franchising Handbook, build the understanding of the franchise relationship.
  • Select a system and initiate the application process if you find your decision appropriate and comfortable.
  • Including working capital, you have to ensure your sufficient borrowing capacity to establish successful business.
  • Always check that you have received and evaluated all disclosure materials properly.
  • Before making any final commitment make sure that you have received legal and accounting advice from lawyers and accountants with franchise experience.
  • Always check your facts and figures in the cooling-off period and determine that do you still want to proceed.

You should consider prior list of things before buying a franchise and if you work through these steps it will be at less risk, eliminating rushing headlong into a hasty and ill-informed decision.

A unique relation is required between the owner of the system (franchisor) and the owner of the individual outlet (franchisee) for the business format franchising, which is commonly referred as a "commercial marriage". The ongoing business relationship between franchisor and franchisee includes the service and trademark, as well as the entire business concept itself from marketing strategy and plan, systems and formats, quality control and ongoing assistance, guidance and supervision.

Franchise Fees and Costs

Franchisors collect directly or indirectly payments from the franchisees to provide them the right to use their brand as well as to participate in their systems. Some ongoing fees are also required to pay from the franchisee to the franchise support that may be calculated as a percentage of company's turnover and it may be fixed as monthly bases.

Always take advice from qualified and experienced advisors, it will be beneficial for anyone who is becoming a franchisee competent professional. The Franchise council members committed any FCA designated member Code of Conduct as well as the mandatory Franchising Code of Conduct.

While dealing with goods or products, or the provision of services, franchise should consider various points to do assessment.

  • Are franchisees dealing with new products
  • Is there any service that provided to a new product
  • What is the reputation of the product and supplier in market
  • What is the reputation of service and process in market