Advantages of the franchise system

Let's look at the benefits for both the franchisor and the franchisee.

Being a recognized brand in the market, the franchisor sees further growth as one of its following goals. Assessing the realities of the market and his own resources, he chooses between opening new branches or selling a franchise. The reasons for choosing franchising and its advantages are as follows:

- Business growth without expanding the management system

There is no need to hire regional managers, because their role is assumed by franchisees - motivated business partners.

- Financial protection

The direct costs of creating a business (recrement of employees, purchase of equipment, advertising budget, etc.) are paid by the franchisee.

- Quick access to new markets

Unlike the process of opening branches, which requires time and financial resources, franchising has a very important feature today - speed.

- Permanent income

The fee for the use of the franchise right, as well as income from the sale of the franchisor's goods are a regular source of money.

- Advertising

Unlike individual enterprises, the franchise network is much stronger in terms of advertising and promotion of the existing brand.

- Market information

Thanks to the developed franchise network, it is possible to obtain direct information about the market (inquiries and complaints from the audience, peculiarities of the regions).

- Favorable terms of purchase

As a wide network, you can always get more favorable conditions for the purchase of certain goods and components depending on the quantity.

- Motivated managers

Given that the manager (franchisee) is also a franchise investor, his approach to business differs from the approach of an unmotivated manager of a simple branch of the company.

In turn, the franchisee has many advantages in this system. Strength is in unity, and thus the alliance between the franchisor and the franchisee gives an advantage over competitors. Here are the following advantages of purchasing a franchise for an entrepreneur:

- Market-tested business system

The entrepreneur begins work on a business model that has already proven its effectiveness in other markets

- Minimization of risks

Unlike the independent opening of a company, the entrepreneur receives the full support of the franchisor and the experience of the path he has traveled.

- Recognition of consumers

The market will be warmer to accept a well-known brand than a company starting from scratch.

- Low marketing costs

Given that the franchisor is a brand familiar to the audience, the franchisee will not need to spend too much money on advertising the company.

- Many years of experience as a franchisor

A ready-made brand system, proven over the years, saves franchisee resources, such as time and money, to study the field and business.

- Departure to the sphere of interest of the franchisee

A franchisee who does not have initial knowledge in any field, but is interested in it and believes in the prospects of the industry, can do what they love without spending years gaining independent experience.

- Convenience of recruitment and training processes

The adaptation process is greatly simplified thanks to the leadership and assistance of the franchisor in training employees, as well as a well-organized system.