Franchising is small business with the capacity to become a big business. A perfect example is the massive expansion of McDonald’s. The difference between franchising and the other forms of business, such as manufacturing and retail is that it provides opportunity, prosperity, security and a sense of continuing growth. Franchising allows entrepreneurs to partner with others for the benefit of the brand thereby ensuring rapid expansion of a business much quicker than what can be achieved through company-owned expansion. By attracting investors to open up additional outlets or stores of the company, the investment is coupled by the personal focus and resources delivered by the investor. A franchisee with necessary knowledge about local trading conditions and empowered by brand name, standardization systems and procedures of the franchise system may operate with much greater drive and motivation than perhaps an employee operating in the same role. Given the diversity and the sheer size of the country, Franchising is the only viable model, for both small companies and large corporation to actually penetrate the tier II and tier III cities in India. Franchising can be broadly distinguished in two distinct categories: Product Distribution franchising and Business Format Franchising. In today’s competitive tie ups, product has to be offered to a customer with high level of customer service which has bought the brand into a dilemma of either adding a franchise channel or conversion of existing dealer/distributor into a franchise. While there maybe a possibility of channel conflict, franchising is viable business development tool as it provides two important elements that other channels may lack: increased control of unit operations and the brand association and an ability to generate fees for the services that many dealers are forced to give away. Moreover, the increased control, provided by franchising, can often lead to improved performance and the associated improvement in sales.
The relative inexperience of fresh graduates is not perceived as a hurdle by franchisors because the core of franchised businesses is that a franchisor gives the brand name, training, systems and strategies and continuous support while a franchisee promise dedication to business operations at local level, and time and money commitment. A graduate’s energy and enthusiasm to do business would certainly make up for his inexperience in many areas, while a franchisor’s support would shorten his learning curve.
A professional always harbors a dream of leaving his 9 to 5 job someday and getting into business. A lot of franchise companies are attracting professionals as they fit in the bill owing to their past industry experience and network. Franchising is even better when the economy is bad, as corporations get downsized, a severance check may help you buy a franchise. Franchisors always admire the possibility of having knowledgeable and well networked professional as franchisees on board.
Military Veterans after living years of discipline life, taking indefinite pressures, inbuilt responsibility and resolute integrity to a cause, make retired military professionals one of the best set of franchises a franchisor could ask for. Military veterans, also for these innate characteristics, are favorites with banks. Thus, it is easier for them to get business loans.
Today’s baby boomer generation is not apprehensive of the word “retirement” as franchising has enabled their excitement for living a complete life post retirement. These people have made a lot of companies successful in their working career and are well placed to run their own business efficiently. A franchise system comes with inbuilt training and support which creates a secure business ownership.
Clocking a resounding growth at 35-40%, Indian franchise industry has proven its efficacy in the business world. Franchise business model is rapidly gaining popularity amongst those who are keen to own a business yet don’t want to tread on a risky path. But sometimes franchise business too falters when a franchisee fails to meet a franchisor’s expectations. Therefore, it is imperative that one enters into franchise business well prepared.