Benefit Of Franchising

  • Benefit Of Franchising

Benefits of Franchising

1-Well-established Business:

A franchise is a well-known and successful firm that wants to extend its market share via the assistance of a local representative.

2-Need limited investment:

The investment necessary to enter a franchise is relatively reasonable because the franchise has already developed it.

3-Easy entry in new market:

A franchisor may easily enter a new market since the firm has already built its brand and goodwill is existing regions.

 4-Business has Large Establishments: 

In general, a franchise is a large-scale business that works on a worldwide scale through a network of local agents in various market areas.

 5-Facilitates in Diverting Business Risks:

A business owner may diversify his risks by establishing many shops in various areas throughout the world.

6-Results in Large Turnover 

The franchisor's management and franchisee's service skills benefit society and result in large sales volume. The brand name and hyper publicity also have an impact on turnover.

7-Division of Labour and Specialization 

Division of labor and specialization are used in franchising. While the franchisor concentrates on the manufacturing system, the franchisee is in charge of distribution and services at the unit level. This work pattern benefits both the franchisor and the franchisee.

8-Allows Use of BI and Name and Trademark:

In a franchise, the franchisee is allowed to utilize the franchisor's trademark and brand name to manage and build the franchise business globally.

9-Business is Based on Mutual Agreement

A franchise business is founded on certain terms and conditions or a mutual agreement. This contract is based on mutual understanding between the franchisor and the franchisee. To avoid disagreements, the agreement must be carefully structured.

10-Long-Term Relationship to Meet Success: 

A long-term connection between the franchisor and the franchise is necessary for the effective operation of a franchise firm. It assures future business development and profitability. Aside from that, it allows the franchisor to market a franchise more successfully, introduce essential modifications into the system, and inspire the franchisee and its staff members to maintain and enhance the quality of products and services.

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