Business Franchising - Expanding Your Business

Franchise can be said to be the authorization granted by a company for its products or services to be sold or distributed at a certain location. It is also the positive influence on the buying behavior of customers exerted by the reputation of a company or a brand. Before I go fully into this very topic, I want us to take note of the fact that corporations can attain global recognition as well as increase profits without taking much risk via the sale of a business plan, expertise, and a brand to business owners pertaining to a specific region.

_{Image source: Pixabay, Creative Commons}

There is a massive number and specific variations of franchises. Franchising is a method or skill that is used by some companies such as Hyatt luxury hotel chain and McDonald's fast food outlets. We have two basic members of a franchise. They are franchiser and franchisee. The franchisee is the one who buy the brand, business plan and expertise from the franchiser. Once the franchisee get inhold of all of this entities, he/she then begin to handle the establishment and management of the business. Global recognition, trusted brand and the ability to increase profits are the major benefits the franchiser stand to gain from this transaction. Moreover, the franchisee also has some benefits to him/her (self). They include low level of risk and the ease with which he will be able to operate the new business since the stress of developing an unknown brand or coming up with a new business plan is eliminated.

In the late twentieth century, the antiquated becoming idea of franchising was brough back to life due to the high interest shown in causing the business structure to change from being concentrated at one point to being distributed across a number of points. American has been shown to have an approximate number of 540,000 franchises by 1999, with new franchises coming up each business day at the rate of 1 franchise per every 6.5 minutes. A good example of an enterprise that have recorded success using franchise in its business is Starbucks. In 1971, Starbucks came into existence starting with a single store in Seattle's Pike Place Market, of which decided to introduce franchising into their business, and as at 2006, they've recorded a good number of 8,000 locations in over 37 countries with about $3,000 profits to themself. The following points should be put into practice when carrying out franchising:

• Do make sure to earn yourself a good and trusted reputation among customers via the consistent delivery of goods and services that are of high quality accross all franchises.

• If you create a new franchise too close to an already existing one, one task may become fragmented and you may lose the deal. Although this particular business practice may benefit you at the long run, but it is important you also take the consequences into consideration.

• Make sure franchises differ from investors in a business who by agreement or otherwise can not take an active role in the management of the business or corporation formed by the combination of several smaller corporations whose activities are unrelated to the corporation's primary activity, so as to achieve a higher level of independence.

• If you are selling or buying a franchise, make sure to request for the help of a competent and experienced lawyer or consultant. In conclusion, I want you to take note that the key to success is having the right business goods or services, having a good understanding of the details, agreeing on common terms and working together as a team.

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_REFERENCE

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• _{Great business ideas from leading companies around the world by Jeremi Kourdi.}

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_{Also published on my whaleshares blog}