Benefits of Running a Franchise Business and How to Start It
Looking at the franchise business might be one that is quite appropriate at this time. What's more, there are already many trademarks that open franchise opportunities for capital owners. This franchise business model also promises a myriad of benefits for the business actors.
Call it big brands like McDonald's, Starbucks, and Kopi Kenangan, which already dominate the market. Having one of its branches is of course a pretty good long-term investment asset. There are many more benefits that can be obtained from having this franchise business.
Find out the advantages that can be obtained by the owner of capital if you take a franchise business. If you have found a decision, immediately take the steps to start opening your own branch.
Franchise Business Benefits
A business must have been running before the owner opened the opportunity to other parties. The following are the advantages that can be obtained by capital owners who buy a franchise business:
1. Familiar trademark
Brand recognition is an advantage brought by the franchise business. In contrast to personal businesses that are built from scratch, capital owners who buy rights to trademarks do not need to form a market. The market must have been formed and franchise business people only need to enjoy it.
Even more so if you take a right from a trademark that has spread in many countries. It only takes time to reach the Break Even Point (BEP) or return on investment.
2. Business assistance
Another benefit that can be obtained from capital owners is business assistance, starting from planning. Capital owners also have the right to obtain information related to the business they are running. Big brand owners will of course accompany their business partners during the work contract.
The failure of a franchise business is a failure for all parties. The reason is, this will reduce trust for other capital owners who want to take part in this franchise system. So, they will definitely do whatever it takes to achieve that advantage.
3. Minimal risk of failure
Failing in business certainly exists. However, failure in a franchise business is smaller than when starting a business using its own trademark. The reason is, the owner of capital will be incorporated in a large community of a trademark.
A brand that already has a big name usually has a good business concept. The business strategy that has been implemented has also been well tested. The proof, they can open a franchise to outsiders.
4. Relatively easy to run
Capital owners no longer need to think about concepts, employee training, brand image, distribution and marketing strategies. Everything will be taken care of directly by the franchise provider company. Usually, business branches owned by capital owners only need to follow the existing system.
Some franchisors will help with everything needed before the business starts. Capital owners only need to prepare investment funds at the beginning. The amount will also be fixed and clearly written in the cooperation agreement later.
5. Obtain capable resources
Human resources (HR) is very crucial in a business. To get it, large businesses will certainly provide training for employees. The employee will be given training up to the point he is ready to do his daily work.
Not only that, all matters related to employees have also been regulated by the trademark owner company. This will make it easier for owners of capital to run their business with standard operating procedures.
6. Can maximize raw material capital
For culinary franchises, the availability of raw materials must always be considered. So, the advantage that can be obtained by these franchise branches is a good supply chain. This means that capital owners no longer need to look for vendors that provide all the raw materials they want.
It's not finished yet. Franchise contract buyers will also get special prices for the raw materials needed. With the selling price that has been agreed upon, the profit that can be generated can be maximized.
7. Easy profit sharing system
Financial affairs are always a challenge in running a business, regardless of the type of business. However, capital owners can relax more with the franchise business system. A number of large businesses already have a fairly good financial system.
Investors will receive very comprehensive financial reports, from daily, monthly to annual reports. Likewise when closing the book and dividing the results so that you can know the total profit earned.
How to Start a Franchise Business
After knowing the benefits that can be obtained, the next step is to start planning the franchise business. The following steps must be taken to start a franchise business now:
1. Do research related to the brand
All brands will promise profits with calculations on paper. However, these calculations sometimes do not match the reality on the ground. Factors of economic conditions and market trends can be very influential in this regard.
Therefore, try to do all the research before starting the business. Capital owners must know the ins and outs associated with the brand, starting from the product to the market. Then, connect the product with market needs at this time. No matter how good the product is, it will not be captured when the market doesn't need it.
2. Compare one franchise to another
The number of trademarks that open up business opportunities is an advantage for capital owners. The reason is, capital owners can make comparisons with one another. Of course this affects the franchise price and the promised profit potential.
In addition, find out the additional costs that must be paid by those who intend to buy the franchise. The following is also the duration of the cooperation contract that will be carried out and the opportunity to continue the cooperation.
To compare, capital owners can collect business proposals from trademarks. This can be obtained through the website or social media. Don't forget to ask for testimonials from those who have already run a similar business.
3. Calculate financial ability
Don't forget this part either. Capital owners must also know their purchasing power. This will also determine which brands to buy franchise contracts and what kind of development will be carried out.
Avoid spending capital at the start. In business, there are unexpected expenses that may require additional capital.
4. Fulfill all franchise requirements
No less important is the document for opening a new branch. Owners of capital can be responsible for themselves by becoming a franchisee or a person entitled to run a franchise business. The document is needed for a legal basis in the event of unwanted things.
Capital owners also need to provide a place to run their business. The place must also be adjusted to business needs. After everything is in order, the capital owner only needs to determine when to open the branch.
5. Create a business plan
Even though this franchise business actually already has a system, the owner of the capital still needs to develop his own business plan. The business owner must know the steps that will be taken later, including the development plan of this franchise business. Maybe the plan to open a new branch or other business in a different place.
6. Conduct employee recruitment and training
Long before carrying out the opening, it is necessary to recruit employees. Business owners are also usually given the authority to find suitable employees themselves. After that, employees will be given training within a certain time. Usually they will be assigned to another branch to work directly with their daily work.
7. Do the opening / launching
Opening day is key to rallying the market. Therefore, do a way so that people want to come and do transactions there. One way is to implement a promo or hold an activity that can attract people to come.
Those are the ins and outs of the franchise business. For those of you who are considering the potential to start a business that is safe and more planned, maybe now is the time to do some research to open your own franchise business.