Have you ever wondered the sudden proliferation of so many businesses and keep hearing the word “Franchise”? Social Media as well as Print, TV and Radio carry news about how successful people became upon getting into a franchise.
A small brand, which may be obscure from the public eye, may suddenly be seen as sprouting in key locations of the metropolis or the major islands. In fact do not be surprised to witness seeing brands from the Philippines present in other countries.
Development of Prototype: Franchising has been the acknowledged method of expanding the business. In the initial stages, it is the entrepreneur who advanced certain amount of capital as well as the development. These are the concept, documenting procedures, identifying strength and areas of improvement in products, services as well as identifying target customers. There are numerous challenges entrepreneurs continually face.
Among these other challenges;
Right location for the Business
Location may be right but how about the lease terms and rates?
Manpower
Suppliers and Credit terms
Success of the business is not a guarantee. The entrepreneur has to contend and face with competition and arrive at strategic ways and means to grow. In the initial years of an entrepreneur, sleep deprivation is common. It will be lucky to have at least 4 hours of well-rested sleep. Most of the time, the entrepreneur has just a handful of employees as to monitor expenses.
What keeps going is the desire and passion for the business. Most entrepreneurs tend not to complain. There is always positive knowing in their mindset. Physically they be tired yet fulfilled.
The next two to three years of business, the entrepreneur is already getting acquainted in the day-to-day operations. Though not as smooth as it may be, the business can be seen displaying its sales potential.
Crossroads in Business: The entrepreneur is faced a number of opportunities like an offer to establish in another location or people asking for a franchise.
It is at this point when the entrepreneur may either move or remain status quo. Assuming the entrepreneur has a vast amount of money, he would most likely put another branch. For most entrepreneurs, they may not be willing to expand on their own for lack of sufficient capital. The entrepreneur must ensure his business model is profitable, acceptable as well as easily replicated.
In Franchising, parties interested invest in establishing a branch: With people inquiring for a franchise, the entrepreneur is now given the opportunity to expand. What the entrepreneur has to prepare is to document the total cost to invest in his business. This is called the Investment Matrix. The advantage here is the business begins to flourish with other people putting in the money. However it must noted here that, franchising is not merely obtaining the money from other people. The entrepreneur must also identify the support to be provided on a continuous basis. Example is training of manpower, research and development for products and services, marketing strategies.
Relationship Between Franchisor and Franchisee Spell SYNERGY: Having franchisees in the business creates a broad network for the entrepreneur. A healthy and harmonious business relations will lead to both parties having an exchange of ideas. Both parties work toward a mutual goal of making the business be profitable.
Supervision of Branches are Under the Franchisees to Manage: If the entrepreneur decided to keep on building and maintaining branches on his won, it would have created numbers without quality. Under Franchising, the franchisees are trained and required to manage and maintain their respective branches. The role of the franchisor is to send his representatives to check from time to time on the basis of the set standards. A poorly managed franchised branch may be taken over after due process and sufficient warnings to the franchisee. Termination may even be the last resort.
Leverage with Suppliers: With a growing network of branches, suppliers will give priority to the franchisor. This includes better credit terms and price. There are suppliers who will provide media support like advertising and promotions.
Support Organization: To ensure the sustainability and growth of the business, the franchisor is now able to professionalize the business. Instead of just having everything done by the entrepreneur, there are people assigned to deal with key areas of the business.
Brand Value: The overall advantage for the entrepreneur is adding value to the brand. The goal is to make every branch perform at its best. Consistency is the key word.
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You may contact Armando “Butz” Bartolome for questions and more information.
By email: aob@gmb.ph
FB Page: Armando Bartolome
Linkedin: https://www.linkedin.com/in/franguru/
Website: https://www.gmb.ph
