Franchising As A Way Of Business

Business Franchising is very lucrative way of doing business.  Business Franchising was the marketing tool which helped make McDonald's, Walmart, KFC etc as well known as they are.

In business franchising, the franchisor or the owner of the brand or business providing the product/service, allows other individuals called the Franchisees, the right to market, sell, distribute the franchisors products and services.

The franchisor support usually includes marketing, organizing, training, merchandising and management of the business franchised.
Business Franchising comes in various models.

Take the case of motor vehicles dealerships. These dealers are fitted into the Business Franchise model named "Manufacturer To Retailer". Here the products of the manufacturer is sold by the retailer to the public.

The other business franchise models include 'Manufacturer to Wholesaler'. 'Wholesaler to Retailer' and 'Retailer to Retailer'. These models are self-explanatory from their names. In the case of a softdrink distributor, the business franchise is 'Manufacturer to Wholesaler'. In the case of a autospares and hardware dealer , the business franchise is "Wholesaler to retailer'. The last model 'Retailer to Retailer' is the basic business format franchise. Here the products/services of a retailer are sold through a network of franchisee outlets.(Example: Baskin Robbins Ice Creams,Dominos Pizzas etc.)

The relationship between the franchisor and the franchisee is tilted in favour of the franchisor. The franchisor , during the period of the business franchise, makes available the trademark, the goodwill and the products and services of his business to the franchisee. The business franchise model serves to reduce the cost of expansion to the franchisor and saves the establishment of a market to the franchisee. While the franchisor saves on fresh capital outlay the franchisee is spared the hassles of initial marketing and brand establishment expenditures.

While there are many advantages to the business franchising model, like any business venture, business franchising too is risk-prone. Unless the right fanchisor is identified and the right location identified, the franchised business may prove to be a non-starter. Lot of thought and business strategy must go in to the process of business franchising if the franchise is to succeed. Return on Investments is really lucrative for the right business franchise.

This is one of the times that employing a consultant is essential. I believe that it is vital for any small business person to have the expertise of a franchise specialist to advise you.

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