Franchising is the correlation that exists between the franchisor and the franchisee. Conceptually, the franchisor acts as the owner of the product, brand, or business and lends permission to the franchisee in return for some fee wherein they are permitted to use the brand or product.

The concept of franchising has turned out well and has gained massive popularity. Big business owners are readily adopting the concept and are distributing franchises of their business to the potential franchisees. This method of distribution and marketing is hence the pathway towards growth and popularity.

But the question is “Why do business/brand owners even need to distribute the franchise of their business?”

Simply speaking this would help them stretch out their business to various destinations across the globe. Also, this would outreach their brand or business to a wider range of customers which in turn would increase their profitability.

Although brands/businesses have tapped into the strategy of franchise business for their growth and progression, there are ample opportunities and challenges that one must be aware of. So, here is the rundown of certain challenges and opportunities that one might face while entering into the franchise business.

Franchise Business- The Opportunities

1. The Experience Of The Franchisor

It is one of the biggest advantages that make the franchise business a good option for the new-age entrepreneurs as compared to starting a new business where one spends a good sum of money for a trial of the business progression.

Buying a franchise means that you are not just purchasing the business but also years of working experience and the sure-fire operating system of the franchisor.

2. Training

Buying a franchise eliminates the concept of trials and errors that entrepreneurs go through while starting their new business venture.In this case, the franchisor provides the franchisee with the proper training on how to manage the business and maintain the standard with premium services.

3. Leverage The Already Established Brand Image

As we know it takes a lot to develop the image of your brand in the marketing ecosystem. This is therefore one of the most powering advantages that franchise business comes with.

Franchise business is just the expansion of the already established business, which means that you are gifted with the existing brand image and enhanced market credibility.

4. Marketing And Advertising Support

Marketing and advertising for your business are no less than a roller-coaster ride. You need to get a marketing manual for your business and need to make attractive advertising campaigns.

But this is not true for franchise businesses. The franchisor provides all the help and support to attract customers via advertising and marketing campaigns. And the best part is that the franchisor already has an idea about where to invest and how to move ahead in order to experience profitability, so you as a franchisee need not worry.

5. Business Harmony

Buying a franchise means getting into the big family and becoming a member of that family, wherein everyone works in harmony and maintains the synergy of the business. You get to learn many tips and tricks from your associate team members and from the franchisor itself that can help you enhance your entrepreneurial skills.

Franchise Business- The Challenges

1. Relationship With The Franchisor

One of the critical challenges that might arise is the relationship that exists between the franchisor and the franchisee. Working together means working in harmony and coordination.

Entrepreneurs/franchisees sometimes find it difficult to follow the directions mentioned in the operations manual provided by the franchisor. This thus degrades the working potential of the franchisee.

2. Seed-Stage Investments

The franchisors usually ask the franchisee to provide the seed investment for the initial operations of the business. This specific amount can range from thousands to lakhs depending upon the requirements of the business.

It is therefore sometimes tough for the franchisee to arrange for such a big amount for the business. Although, the amount is recovered once the business gets into pace.

3. Human Resource and Aesthetic Infrastructure

Franchise businesses have their own set of requirements when it comes to infrastructure and human resources.The infrastructure is required to be aesthetic that can uphold the image of the brand and align with the needs of the customers.

Hiring the right staff is a challenging task. Different people have different cultural values and work with different potential. For the profit of the business, it is thus required to hire staff that can work in coordination and respond to the needs of the customer in a smooth way.

4. Market Competition And Conduct Of The Customer

With the continuous expansion of brands all over the world, there is a rapid increase in the competition that exists between these brands. This has led to more laborious operations to attract customers and acquire them.

Also, we are aware of the fact that the conduct of the customers and their behavior towards a brand/product is ever-changing, which has made it challenging to survive in the market and earn profit. For example, the shift towards organic products has affected the sales of other industries in the same sector.

5. Social Environment Of The Vicinity

Last but not least, the social environment of the people that surrounds your franchise business is one of the most important factors that decide the flow of your business.

This impacts the business and hence it is required to conduct proper research of the people and the locality before making an expansion.

Conclusion

If you are pondering upon taking up a franchise, then the above-mentioned points are to be considered and focused upon. It will help you fabricate a strategy to run your franchise and earn more profits.