Starting your own business is surely not an easy task, but with the right guidance and hand-holding you would work wonders. Franchise model of business provides you the hand-holding and guidance but sometimes it takes away the charm of innovating a winning business idea.
It has been rightly said that –
Franchise model is the easiest way to enter the business with successful business idea that has already worked its way to success with somebody else’s vision
You would be working on the tried and tested business idea that has already gone through its ups and downs before getting converted into franchise business model. This popular business model has its own advantages that any business enthusiasts would appreciate but at the same time there are some drawbacks which may put you off.
What good to expect from franchise model?
When you buy a franchise, you are entitled to fixed set of advantages and some of those are worth giving a shot!
- Being a part of big business network – You would be a part of big banner once you enter into the franchise agreement. The small investment will fetch business independence, ownership of small business along with the support extended from big business network. The franchisor would support you at each stage of business establishment starting from launch, recruitment, marketing, and operations. There would be an experienced hand involved at each stage of business development.
- Easy Finances – Procuring finance would be easier for the franchise as there is known brand associated with it. The security would not at all be an issue in this case as there would be established business idea associated. The finance involved in setting up the franchise business is also lower compared to the new business with the same idea and setup. If you are lucky enough then your franchisor may also lend you convenient finances with easy return terms.
- Established Business Relationship – Every business would require relationship management with the supplier, customer, and stakeholders. The franchisor would provide you with the well-woven network of suppliers and clients developed through years of experience and thorough marketing.
- Low Failure Rate – The rate of failure is very low as you are supported by the experienced and skillful team.
Drawbacks of entering into franchise agreement
- The agreement is binding and you have to abide by the rules set up by the franchisor.
- The franchisor would asked for fixed share from the profit and hence limit your overall profit. There would be quite a big cut in the overall profit and sometimes you will end up paying a big price for being a part of an established business network. The franchise costs may be governed by the franchisor and you will have to pay hefty for bigger brands.
- Supplier network would be established by the franchisor and there would be no chance to save on your expenses or production cost.
Idea of being a part of large business network with low investment is thrilling but giving away a big share from your earnings is a big drawback. With so many incentives being announced on start-ups and innovative business ideas, you can try your hands on cooking your own food instead of having it from somebody else’s plate!
Writing is not just the profession but it is the passion that keeps me going! This is my way of meditating as I vent out my emotions, thoughts, and knowledge via this amazing medium called – WORDS. With about 9 years of experience in delivering unique and engaging content, I have learnt one thing and that is “There is no end to learning, every new topic is like an encyclopedia” – Happy Writing!