The Modern Day Franchising Model is perhaps the greatest business strategy ever created in the history of mankind. Why you ask? Well, franchising pays dividends to both Franchisee and Franchisor in a Win/Win Situation. When the Franchisees win the Franchisor wins in increased brand name and royalty income.
As the brand name increases the Franchisee finds more loyalty in their customer base and the Franchisor finds a greater number of new entrants wishing to buy into the franchise system as new potential team members or Franchisees. This allows the Franchisor to be more choosy in which potential new team member candidates they decide to sell to and thus strengthens the system again with better franchise buyers with more capital, business acumen and strength of character. Of course each new strong Franchisee increase the strength of the Franchise System.
In franchising it is not merely a Win/Win for the Franchisee and the Franchisor, because such strength in the market place allows for a larger organization, which benefits off the economies of scale and that means lower prices for consumers and customers. Those who partake in the products and services of the franchised outlets also have piece of mind knowing that they will receive quality, great service and consistency. Once the franchise system gets going and if it is run properly it is like a rocket ship.
Is there a downside to franchising? Indeed there is but it is probably not what you think. The Franchising model is a highly regulated industry even though it has the lowest number of complaints, almost nil on a percentage basis and of the less than 1% of complaints that are received each year nearly 70% are unjustified and bogus. Then there is the litigious nature of the franchising industry where lawyers have hijacked the laws and regulations and worked too closely with regulators to mold the rules to their benefit. Some call this a parasitic relationship and few could argue case, expect the self-serving lawyers.
As a Founder of a Franchising Company, I built my company from 53 units in 39 cities where we regionally dominated our industry sub-sector to a full-fledged franchising company serving 450 cities, 110 markets after selling franchises in 23 states and 4-countries. Having built the company literally from scratch and knowing every single job like the back of my hand, I feel qualified to help you understand and discover all you need to know about The Franchise Business Model. I thank you for reading my article and perhaps this article is of interest to propel thought in 2007?
