Franchising is a tool, which helps brands to expand their name and extend their serving hand to the far away territories; it helps in spreading their business across the country.
According to a new study by Forrester Research, approximately a fifth of total retail sales will take place online by 2021 in Asia Pacific, with 78 percent of that coming from mobile, up from 63 percent in 2016. The study adds that online retail via mobile will grow at a CAGR of 15.6 percent, to reach $1 trillion in 2020, up from $539 billion in 2016.
China accounts for nearly 80 percent of online retail sales in Asia Pacific, and Forrester expects it to become the first market to reach $1 trillion in online retail sales in 2020. Indian market is expected to reach $64 billion by 2021, growing at a five-year CAGR of 31.2 percent.
Brands, which have managed to create big names for themselves in certain cities or region try to push the boundaries but many fear to risk their hard earned name and fame being destroyed for someone else’s fault, which is why franchising as a term remains behind the curtain.
Time to unveil the mask of fear and anxiety, here are some important points to identify the benefits of franchising your business:
Less Capital Investment:
If you have started your business from scratch and made it one of the renowned brands of today, then you would definitely know how much money you have invested in making it what it is today.
But if you are offering franchising to people who are interested in sharing the load of growing the business in some other city or state for your business expansion then you have to let your company open for such franchisees.
They will take care of everything starting from hiring people, setting up the entire store and dealing with customers, you only have to keep a close eye on how he is keeping up the reputation and for the profits.
Avoid Employee Related Problems:
When there are people working together under one roof, there are chances of ego clashes, difference in opinions and then starts the fiction.
Brand owners already have enough things on his plate to munch, so it is difficult to run the business with bunch of employees, who are always spending time fighting with each other than working. This is one of the major constraints faced by the manager and owner, but franchising will help you shed the load completely on the franchisee.
Simplifies Management Work:
It becomes difficult to manage multiple stores in different cities or states by one person, especially when petty issues start forming bottle neck for the brand’s profit.
In no time, it will start affecting the reputation of the brand, and you would not like to see your hard earned brand name, shatter in pieces.
Franchising will simplify the management work, the franchisee will take care of all the petty issues and you would not even need to intervene or bother.
Profit Collection:
Since you have joined hands with franchisees, the only relation you would share with him/her will be the profit sharer.
As per the contract, if you would like to mention while offering frasnchising that a certain percentage of profit will be shared with you.
Just imagine, no tension of customer complaints, employee related problems and keeping an eye on every one without directly getting involved and at the end of every month or year, you will be handed profit margins.
If that does not satisfy your soul, then I don’t know what does.
