Choosing the franchising route or continuing with the company owned stores

Monday, June 29, 2009

Choosing the franchising route or continuing with the company owned stores

If you are considering franchising option to be the best to sell your own manufacturing stuff, start thinking again. You will do fell for a surprise.

Franchising set up for your business may not be that easy.

There will be lots of intricacies in a franchising route, and how well you are preparing to cope with it is what will matter.

Why should you sell your goods through the franchising route if you are not having enough funds in your coffer?

A company looks to select the franchising option

a) If it wants to expand to places where it cannot have its own stores.

B) If the company doesn’t have any added funds and it looks to expand to farfetched areas, then selecting the franchising option will probably be the best way to sell its goods. But what if the company has money to run its own stores?

It’s essential to understand the need of a franchising set up.

As an entrepreneur if you seek to expand, you will look ahead and choose franchising as an alternative.

But why do you need to go in for a franchising set up? Is it only because franchising will ease your work load? You don’t need to worry about your franchisee who will sell your goods.

One should be aware of the disadvantages of a franchising set up.

A franchisor should be extremely careful when it picks a franchisee.

Many franchisees prefer collaborating with  franchisors to add another brand tag.

The franchisor should be careful with those investors as they will tend to focus on other businesses and take advantage of the brand association in a negative way.

These opportunist franchisees should be avoided at best.

A franchisor also suffers from the fact that it has little control over the franchisee, located at far flung areas.

A franchisee business services may be of poor quality, which is damaging to the franchisor’s reputation.

A franchisor may not know the exact details of the business operation of the franchisee and; therefore, the franchisor should be careful while it selects a franchisee for its business goods.

The biggest disadvantage that a franchisor will be facing is the use of brand association by the franchisee well after it dissociates itself from the franchisee.

It could be damaging to the company’s reputation, and it also gives undue and unethical advantage to the franchisee.

A franchisor should be always continuing to have its own company stores in places where it suits. It should avoid partnering with a franchisee if it has the resources to launch its own stores.

A company who is cash strapped could utilize the possibility of partnering with franchisees, but should be exceedingly careful on selecting an appropriate franchise.

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