Why should you become a franchisee?
What advantages do franchisees have from franchising?
When building up their business, franchisees benefit from the brand awareness and image of a well established brand as well as from the synergies of an established network. Franchisees use the know-how and the support measures provided by the franchisor in his/her contractual area.
The decisive advantages which franchisees have from being involved in a franchise system are:
- Reduction of Risks
The path towards professional independence is safeguarded by a tried and tested business concept and help from the systems head office. A considerable amount of the work which is required when founding a business is taken over by qualified specialists at the head office. As a result franchisees can avoid the typical mistakes made when founding a business and can concentrate on what important efforts must be made to ensure an appropriate turnover is achieved during the start-up phase. During the later phases of the development of the business, too, the franchisors’ economic, organisational and branch-specific know-how help franchisees to avoid mistakes and cut out risks. As a result of the division of tasks between the partners, franchisees can concentrate on fulfilling customer wishes and solving customer problems instead of getting tied down with many other tasks.
Franchisees involved in successful systems can profit from the already well-known brand-name association and these advantages should not be underestimated. Even in the start-up phase well-known names and images help to make the invisible barriers easier to overcome and speed up the access onto the market.
The head office increases the power of the system by coordinating the measures carried out by all people involved. As the franchise network increases, so the system is strengthened as, for example, bulk discounts can be attained through joint purchasing. There are also certain market instruments which can only be applied successfully when a company has reached a certain size and efficiency.
The cooperation within a joint system contributes to an increase in the operative capability of both sides, giving franchise systems competitive advantages, which cannot be ignored. The team spirit, which results from a well-functioning partnership system, creates its own dynamism, enveloping all of the people involved. The interchange of experiences within the system and the continuous help offered by the head office help each of the franchisees to successfully overcome the difficult phases of their business.
The preparation and start-up phases of a new business can be considerably shortened as a result of the franchisors’ experience. This, in turn, results in the foundation costs being considerably reduced. The division of tasks, a characteristic of franchise systems, allows a more rational form of management than is possible for individual businesses. As a result productivity is greater than in the classic form of founding businesses and the profit zone can be reached within a shorter period of time.