Post by muntahaislam222 on Feb 28, 2024 8:01:42 GMT 3
Many entrepreneurs want to open a franchise, but are unsure whether this is really the best business model to invest in. The truth is that, just like opening your own company, opting for a franchise has its advantages and disadvantages. If, on the one hand, entering the market under the auspices of a franchisor helps in terms of credibility, support at the start of operations and assistance with planning, on the other hand, investing in a franchise can limit the potential for innovation, not giving as much freedom in choosing point and not have much flexibility to run the business. Are you considering investing in a franchise? Discover some advantages and disadvantages now before making your decision. Advantages of opening a franchise Strength of the franchisor brand Starting your own business with the credibility of a brand already known in the market certainly brings more security, especially in the case of a beginning entrepreneur. In this sense, as the franchisor already has an established brand, it probably has an extensive and structured list of suppliers, enabling franchisees to obtain special conditions on their orders, such as, for example, longer payment terms, quantity discounts, etc.
The fact of starting a company with a product or service already tested on the market is another point in favor of opting for a franchise. As the franchisor company has already carried out market research and carried out tests, the risk of rejection is greatly reduced, which is a relevant competitive advantage. Franchisor support Having support can make all the difference when starting a business. When investing in a franchise, in addition to counting on the strength of a great brand, the entrepreneur also counts on the support of the franchisor. Franchise manual, assistance in choosing a commercial location Europe Mobile Number List and training for the entrepreneur and his employees are some of the benefits of joining a franchise network. In this way, as it is a standardized system, the franchisee also has the guarantee that all aspects relating to their unit — from the products offered to the furniture, including the logo — have been previously tested and improved after successive tests. As the franchisor's main objective is to protect his brand, the franchisee has the guarantee that he will not be left destitute in the operation of his business. Planning assistance Many businesses fail at the beginning of their operations for one simple reason: a pure lack of planning.
Franchise, the entrepreneur reduces the chances of having problems in this regard, as the franchisor company helps, among other things, to plan costs with the construction and installation of the new unit, in addition to predicting the values needed for the franchise to operate. , such as initial investment, working capital, etc. The franchisor also usually informs the average return on investment, so the franchisee, even before deciding to invest in the business, can plan in advance how much they will have to save until their franchise starts to make a profit. Disadvantages of opening a franchise Innovation potential is limited As it is a system based on standardization, the franchise model can often limit the entrepreneur's potential for innovation. As all brand units must offer, in general, the same products and services, in addition to having the same visual structure, even if the entrepreneur has incredible ideas to increase the business, they have to be, before anything else, submitted to franchising company. Those who always like to innovate in both the mix of products and services may feel hampered by the processes necessary in the franchise system.