Why should you become a franchisor?
What are the reasons behind the dynamism of franchising?
The dynamism of franchising can essentially be put down to the increased process of services and services in return which mark both the growth and the collapse of a system. Differences should, therefore, be made between:
Positive Circular Flows
The success of modern franchising is based on the age-old truism that taking and giving must be carried out in equal amounts. The basis for the growth of a franchise system is a functioning flow of services and services in return. Each successful transaction carried out by a franchisee strengthens the competitive position of the whole system and makes it more attractive to customers, suppliers, financiers and people starting new businesses. The result of combining different positive circular flows can be an above-average rate of growth.
Negative Circular Flows
In certain cases the characteristics of a franchise system can also have a negative effect on the people involved. Negative circular flows result mostly from internal system problems concerning lack of quality, complaints and loss of customers, which in turn result in reductions in turnover, amount of fees and performance. For these negative circular flows to be turned around a blunt analysis of the causes must be carried out by the people involved with necessary action being taken to improve the situation. If there is a combination of negative circular flows then the collapse of the system can only be prevented if all the partners involved make a concerted effort to change matters.