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Franchising
101- What You Absolutely
Need to Know Franchising has made the
world look really small. The well known flavors are now not just restricted
to a single town or city but can be enjoyed world wide. Otherwise it would
only be a dream for somebody in Asia to wear the fashion of Europe, for the
West to have delectable food of the East etc. Globally as well as
domestically the system of franchising has something good for everyone. Franchising basically
is the taking of franchisee- the authority or rights to sell the products of
some company. Most often it is only those companies who have an outstanding
name in the market that go for franchisee outlets. Like a tree expands and
grows through its branches that also bear fruits, so do the renowned
companies enhance their business (sales) through franchising. Franchising gives
them a good opportunity to explore every small town along with overseas
markets. The process to take a
franchisee is simple. All one needs to have is the required security amount
to purchase the particular franchisee and a good place with an adequate business
plan. The amount so taken by the company is for a fixed tenure after which it
needs to be revived in order to continue to sale the company’s product. This security amount
varies with the kind (food, clothes, electronics…) and the market value or the
goodwill of the company. is for a fixed tenure after which it needs to be
revived. Escalating goodwill of a company entails a surge in the figures to
purchase its franchisee. The companies besides the amount are also very
particular and cautious about the area and size of the workplace to open
their franchisee outlet. While handing over
their franchisee to someone nationally or internationally the franchisors
(parent company) educate him of their product, terms and conditions, policies
and style of working. Most often these companies also give certain crucial
tips to prop up the sales of their product. Weekly or bi-weekly
advertisements, hoardings and the like are some of the widely adopted
measures for it. Once a company sells
it franchisee to someone then it is solely the onus and freewill of the
entrepreneur regarding the methods he takes to promote his sales. However the
prices of all articles are set by the parent company are not subject to
modification by the franchisee. Franchisee business
has more or less covered all areas of human needs. Be it food (restaurants
etc.), clothes, jewellery, footwear, bags, makeup kits,
electronics…franchising is meant for all. It is at individual’s discretion to
decide which franchisee he wants to go for. This can be fairly
decided by a vigilant market survey and an assessment of the standard and
tastes of people in that area. For instance it will not be judicious to open
a top brand’s outlet of expensive clothes in a suburb region where people
want to spend bare minimum on their attire. So the kind of outlet to open, in
other words franchisee to take is directly proportional to the needs and
status of the consumers. All the franchisees
have their suppliers fixed. The suppliers have to arrange to get the material
from the parent company and pass it on to every franchisee store that is
linked to it. The ‘sale’ season is
at volition of the franchisee. But the supplier as well as the parent company
should be informed before. The prices during the sales season are reduced to
half or less than that in order to clear the stock which gets accumulated and
is without any serial no.(like there might be just one size or color left of
a shirt, trouser etc.). Usually the franchisees do this in order to recover
their money and make place for the new stock. Thus all in all
franchising is a good business that is beneficial not just for the one who
has taken the franchisee but also for the consumers who get to enjoy the best
of everything in their respective town, city or state.
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