Advantages and downsides of franchising

Franchising has exhibited dramatic growth because it offers some significant advantages when in comparability with other distribution strategies. When starting a business or venturing into entrepreneurship, it’s imperative for one to consider all options. One of probably the most appropriate ways of attaining such an objective is to purchase into a franchise. Business are capable of expand by franchising in order to acquire access to exterior capital that may fund development of latest retailers or stores that are run by committed and profit driven franchisees CITATION Fra12 l 1033 (Frazer, Merrilees, & Wright, 2012).

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These franchisees are extra doubtless to be focused and diligent than employed staff. Therefore, Franchising permits people to become their very own boss. For individuals who wish to apply franchising in the Chinese market, they might wish weight all choices.

Franchising is one one of the best solution for transitioning from employment to a enterprise proprietor. There are a number of businessmen and businesswomen who have thrived and successfully remodeled their monetary lives via franchising.

Venturing into franchising has its benefits and likewise some drawbacks. Besides the startup capital required to turn out to be a franchisee, there may be little planning and thought that’s required when setting up the new enterprise. The new store or outlet has to conform to the image that the franchisor has already arrange. Small details corresponding to the color scheme, to the inventory items to be placed on the menu or on the shelves, are all determined by the franchisor. This arrangement makes is simpler for the franchisee to set up the business and will increase the probabilities of success CITATION Hun11 l 1033 (Hunter, 2011).

Most franchisors give the franchisee detailed training so as to ensure that they develop the required degree of expertise to achieve profitability. This allows the franchisee to have a bit of minds figuring out that the corporate is steering the business in the proper path. One does not should develop an advertising technique or strong branding as that is accomplished by the franchisor.

Although franchising could be perceived as a super answer by some individuals, others cite throwbacks of the business mannequin. Therefore, they prefer multi-level advertising or community marketing, which allows one to become a distributor of a product of and established and a good firm. This permits one to leverage on some nice advantages of being a franchisee whilst overcoming some of the disadvantages associated with it CITATION Hun11 l 1033 (Hunter, 2011).

Firstly, multilevel marketing or network advertising merchandise normally have an excellent degree of branding in that, consumers are able to recognize the product that is supplied to them. Although franchisees also have this benefit, they don’t have the freedom to come up with distinctive structures when it comes to the distribution enterprise. Network marking will, therefore, allow one to have free reign to market their business in whichever means they like CITATION Fra12 l 1033 (Frazer, Merrilees, & Wright, 2012).

Another advantage that network marketing has over franchising is that little startup capital is required to become a distributor. One is only required to pay a little amount of cash to hitch a community, whereas some networks require annual charges CITATION Hun11 l 1033 (Hunter, 2011). Additionally, one may be required to buy the product in advance in order that it can be delivered to the shoppers as the sales are made. All in all, the entire amount of money required to run a worthwhile community is much less than what is required when one is a franchise.

References

BIBLIOGRAPHY Frazer, L., Merrilees, B., & Wright, O. (2012). Power and management in the franchise network: An investigation of ex-franchisees and model piracy. Journal of Marketing Management, 11-29.

Hunter, R. (2011). MASTER FRANCHISING AS AN ENTRY STRATEGY: MARKETING AND LEGAL IMPLICATIONS. The Coastal Business Journal, 16-27.

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