One of the biggest dreams that people have today is to become their own boss. They want to lead an organisation on their own terms. However, it can be overwhelming to start a business without knowing whether it will result in success or failure. Is the franchise model a suitable option for those who wish to become entrepreneurs, but want the safety of beginning their journey within an already established company?
Well known brands
There are many advantages to going ahead with a franchise company. One of these advantages is that the franchise taker (franchisee) is committing to an already well-known brand. Building up a brand can take years, as well as finding the target group for your business. Becoming a franchisee means being able to benefit from instant brand recognition without all the hard work, risk, and huge expenses usually associated with this level of endorsement.
The head company have an established corner of the market. This gives the franchisee extra security. The business is most likely well known, and its arrival may even be celebrated by the locals. Franchising is often considered as an opportunity where you can learn the basics of entrepreneurship. These skills may be valuable for the future. Becoming part of a global network might make it more straightforward when it comes to establishing a new business.
Businesses have their own expectations when it comes to the ideal franchisee. Most of their requirements are in regard to the financial aspects that may concern the company. Any multinational company wants to be sure that the time and effort invested in establishing a franchise will set up all franchisees with the best chances of success. A franchisee who is willing to invest the amount of capital required shows promise, and has a higher chance of approval by the head company. An individual’s driving force and motivation is often the key to their success. The will to succeed helps build a firm foundation for the business.
There are risks
It may sound like a dream to become a franchisee, however, there are several aspects to be taken into consideration before diving in.
In the case of a franchised business, marketing must be united across all stores, and agreeing to united marketing plans tends to be a common requirement that most franchised companies have. For many this may be a relief, as it means the franchisee has no need to create a marketing plan of their own. However, if a marketing decision turns out not to be a success, the franchisee will have had no choice other than to accept it. This requires faith in the concept and the company, on behalf of the franchisee, even when some decisions might be less than ideal for their own store. Ultimately, decisions will always be made to the benefit of the whole company, before individual branches. Of course, if the marketing plan goes well then the franchisee is able to take share in the success of the company and in turn see their own branch grow.
A way to grow
Ensuring that your business will be prosperous is a challenge for every entrepreneur, regardless of whether they are a franchisee or have started their own company. However, becoming a franchisee can be an optimal way to gain experience and learn how to manage a business, all the while learning from a company that is already successful.
Not every company that runs a successful franchise is necessarily a success in every contry. An example of this is Starbucks. Despite having set up a hugely popular global franchise, they found it difficult to establish a presence in France. Essentially, the French are opposed to coffee-to-go. French coffee-culture values taking the time to enjoy your coffee, rather than filling a cardboard cup and dashing off to a meeting or the office. This is in stark contrast to what Starbucks had been championing thus far. They finally set up their first store in Paris in 2004, six years after first establishing themselves in Europe.
Franchising is a great opportunity if you want to become an entrepreneur. While the franchisee may get internal recognition for their efforts from within the company, all external admiration will be directed towards the head company. Is this enough for everyone? Or might this contribute to many ambitious entrepreneurs being put off by an otherwise enticing model?
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