Franchising is an effective and fast way to establish a new business it substantially reduces the gestation period and entrepreneur shall be embarking on the tried and tested products and services. Horwath MAK can offer franchise from UK, USA, Europe, Canada, and Australia for any major Products or Services
Franchising is the most dynamic method of business expansion ever devised. By franchising, many businesses have grown from a handful of units (or even just one unit) to hundreds or sometimes thousands of units within a few years. No other approach even comes close to the market scope and growth rate offered by franchising.
Franchising is a method of marketing and distribution. It works by cloning a successful business. Basically, franchising is an arrangement whereby one party (the franchisor) grants another party (the franchisee) the right to run a business using the trademarks and business system (format) developed by the franchisor. For this right to copy the successful business, the franchisee pays a front-end franchisee fee. The franchisee also pays a franchise royalty, which is a percentage of sales ranging from about 3% to usually not more than 8% of the franchisee revenue.
Advantages to the Franchisor:
By franchising, one can:-
- Expand the business more rapidly
- Since the franchisees contribute to an advertising fund, one can expand brand awareness with out financial commitment
- The franchisees provide the capital for expansion, which allows a high degree of financial leverage
- Franchisees are far more motivated to maximize sales and profits than salaried branch managers
- Franchisees are also more responsive to local markets than salaried managers
- Finally, franchisees are an important source of new marketing and product concepts, which can benefit entire franchise network and increase the royalties received.
Advantages to the Franchisee:-
- The franchisee buys into an already proven business concept - hence do not have to “reinvent wheel”
- Through training and manuals, franchisee has a well defined track upon which the business can be operated.
- As issues arises, franchisee can turn to the franchisor for advise and expertise.
- As the franchise network expands, he receives the benefits of enhanced brand recognition.
- Franchisees are also more responsive to local markets than salaried managers.
- When the franchisees as a group gain experience, they can provide ideas and answers to each other's questions.
- Hence, the franchisee is in business for himself, but not by himself.
Despite these powerful advantages, franchising, like any other business activity, does carry risks and requires significant effort. It is not without challenges and risks
Horwath MAK International Consulting helps you to minimize the risks and maximize the chances of success for all involved. Horwath MAK renders professional guidance of franchising business through out Middle East and particularly in UAE