Franchise concept and key principles of success - Mega guide

October 16, 2017 0 Comments

Welcome to the mega guide the franchise . Let's talk in this post everything you need to know about franchises, whether on line, off line ... but above all be profitable and successful . You dare?
And while we start, where do we do?
Because at the beginning; Let's go there!

What is a franchise, what is franchising?

A franchise business is a way in which a person or company (the franchisor or franchisor) to another (the franchisee or franchisee) the right operating system business in exchange for financial consideration .
This consideration usually consists of an initial fee and a royalty. The fee is the amount of money the franchisee pays the franchisor to acquire permission to use their brand and way of working. Royalties are the price you pay each month to be using that system business.
For you see it clearer, say an example:
I have a hamburger business. You want to open a restaurant using my brand, my advertising, my prestige, etc., so you decide to mount a franchise using my name.
To this end, we signed a contract, I facilitated the logo, suppliers, etc. and you pay me a down payment. In addition, at the end of the month, you pay me a commission of 20% of your income.
Of course, right?

What, therefore, the essential elements of a franchise?

These elements are those that determine the contractual relationship between the parties, and in essence would become the following:

franchisee

The natural or legal person who owns a brand and a knowhow own and decides to transfer them to another person (the franchisee) in exchange for financial remuneration.

Franchisee

The natural or legal person who sets up his company in partnership with the franchisor, allowing you to start a business whose success has been proven, thus reducing the risk it faces.

Brand

The stronghold of business, the key. The franchisor has the property of a brand and gives use the franchisee, who will use it in accordance with the corporate identity and relevant instructions.

Know how

Know - how, ie, processes, systems and own brand standards. After this I would say is the second most important distinctive business, the key to the franchise is profitable and successful . Normally, the franchisee will receive a manual with operating procedures.

Contract

The legal document that determines the relationship between the parties, which come together to achieve the success of the franchise . This agreement will be reflected authorization franchisor to the franchisee uses the brand and the know - how of the company, in addition to the obligation of the latter to respect the distinctive characteristics of the business.
And it's easy to get success with a franchise, it's easy to create and expand profitable franchises?
I would say there are examples.

Examples of successful franchises and types of them

There are many franchises that have been successful . You can look at them and why they have succeeded. It sure helps you discern if your idea is viable or not.
Let's make a classification and see in each type of franchise an example of those who have been profitable.
Here you go.

business franchises

They are those in which the franchisor gives its franchisees the necessary elements for the sale of products or services to the customer. It is a widely used model that allows businesses to quickly replicate the success it has already been proven, which greatly facilitates the internationalization of the company.
An example is the mobile shop Phone House .

industrial franchising

In this case, the franchisor grants the franchisee the know - how (know - how), the right manufacturing, product marketing, branding, administrative procedures and management.
An example is Coca-Cola .

Production franchises

The franchisor manufactures the products and the franchisee sells. This contract is usually required or franchisees to distribute these products exclusively. Thus, the manufacturer ensures that its production is to be sold.
An example is the clothing company Mango .

Distribution franchises

The franchisor is dedicated to resell the products manufactured by other companies (franchisees). Typically also it employs another franchise network for distribution. In this case, it acts as a purchasing.
Stated differently: the franchisees are the producers and sell their products to the franchisor. This, in turn, can choose to sell it or have a number of franchised dealers.
An example of such is the French supermarket chain Intermarché .

Franchise Service

Which are aimed at providing a specialized service, so it also becomes very important the know - how . The franchisor, in this case, the franchisee will provide and require a very specific way of providing that service.
An enabling sector this type of franchise is the car rental. For example, Avis .

Franchising corner

They are those in which the business is established within another facility. Thus costs (water, electricity, office rent ...) are saved. Must exist for this model to work, an affinity between the franchise and business in which it is located.
One example is the housing stalls selling mobile you see in the halls of shopping malls.

Master or principal franchises

Finally, this type of franchise is a special type of franchise , in which the franchisor grants the master franchisee the right to operate the franchise in a vast territory through partnerships with other franchisees. It is the model that is often used to export the business to another country.
An example is Alfa Real Estate .
Have you seen how many types of franchises are there? Well , let's now see the rights and obligations of the parties as a franchise , as in any business, there are two parts, two intervening positions, each with its rights and obligations, that not only have, but They must fulfill and respect for the business profitable and successful for both.

Rights and obligations in a franchise

These are the rights and obligations that make the relationship between the parties for the smooth running of the business.

Franchiser rights

  • Right to charge an initial fee and royalties for each brand and know - how
  • Right to make strategic decisions it deems appropriate.
  • The franchisee the right to demand compliance with the regulations the confidentiality of internal processes and the use of management methods desired.

Obligations of the franchisor

  • Enrolled in the Register of Franchisors or relevant institution or to replace him.
  • Controlling stocks (if any) and the quality of products or services.
  • Facilitate suppliers and / or goods necessary to the franchisee.
  • The same advice as needed.

Franchisee rights

  • Right to use the brand and know - how while the contract is in force.
  • Right to be assisted by the franchisor for the implementation of the business (for example, through an operating manual).
  • The right to receive assistance from the franchisor whenever necessary.
  • Right it furnishes the necessary materials for the development of the activity
  • Right to territorial exclusivity in business.

Obligations of the franchisee

  • Follow the methods and systems to mark the franchise owner
  • Maintain the confidentiality of internal processes
  • Use approved suppliers
  • Respect the rules established for the refurbishment of the premises, advertising methods franchise and any other distinctive feature or element thereof.
Seeing which, and just in case you're cheering, What are you have to do to set up a franchise !

Attaching a franchise if you want to create a business

Now that you know what they are franchises, their types, main elements ... you may be interested in opening a. What you have to do, where to start?
There are two major phases: first, the choice of idea or franchise itself; the second, the next steps to materialize.

Ideas to create a franchise

You might have many ideas in my head. However, you do not know what is more profitable, which has less risk and requires less investment.
Today, moreover, the options business, some of them quite multiply innovative and successful, although apparently ridiculous.
For the work of search and selection are platforms that have registered many franchises of many kinds.
One is Franquiciator . This platform is a comparator franchise , a website where you can find franchises sorted by sector and other criteria . It serves both entrepreneurs who want to be franchisees to business owners who want to franchise it.

Steps to set up a franchise

Business viability studies

The traditional business planning and business says you must follow these 4 steps:
  • Develops business idea. What are you going to sell? Where? How? To who? What makes it different?
  • Then do a study of that business. Analyze your competition.
  • SWOT analysis. Know your weaknesses, threats, strengths and opportunities.
  • economic forecasts. You enter specifies what you anticipate and spend each month.
This, as I say, is what the traditional education system. I, honestly, I usually jump all over me because I am quite another way of acting and thinking, but that we go beyond today's topic. I'll talk ...

Determines the legal form of the company

Broadly speaking, you must determine whether you will be an individual entrepreneur (freelance, freelance) or you will create a legal person, a society.
In the latter case can be both a civil society as a merchant, and among them there are several types: anonymous, limited liability ...
In almost all legislation (Spain, for example) it is possible to form a company with a single member, is you alone, without partners. This is a great decision by the tax advantages and responsibility involved, therefore, even if you are on your own, consider setting up a company, you might be interested.

seek funding

I am not in favor of endeudarte (except banks), but if there is no choice ...
Although I 'm sure there is 🙂. You have nothing saved? You do not have family or friends who want to go into business as silent partners? You can not start with the basics, without asking for anything?
I know the leverage through debt can be a great springboard to make money or start a path of success in business , but I know, I know ... I can not. I must not sleep well.

Get local

Unless it is an online franchise you must make a local.
In this regard you can rent or purchase. What is better? There is neither better nor worse, they are different things. It depends on the money you have, which you pay, you prefer to hoard properties or instead only use ...

Licenses and permits

With the administration we have encountered.
The administration wants papers and money. Specifically, he wants to fill in paperwork and pay fees (if he had not explained well 🙂). So you know: you must comply with all laws and regulations of each site.
(Remember that song that said, I'm sorry, the world is like, I have not invented yoooooWell that?)

How to Promote a franchise

And if you are the owner of a company that want to franchise , what you can not stop doing is promoting it to make it known and meet franchisees.
We know that this means spending money, but thinks more spending is investing. Many people wonder where to invest money . Well then, in your own business, expand it and make it grow!
You can do several actions in this regard:
  • Attend trade shows and industry events, such as Expo Franchise . In them you can meet a very qualified potential customers looking for an opportunity to invest and with which you can make a very effective networking audience.
  • Make a specific web page or a section within you already have, if any.
  • Create an online marketing plan , which is a written document in which business goals are defined to achieve in a given period and the strategies and actions to be performed in the digital environment to achieve the same detailed. With it you will learn various strategies to multiply income in your business: do it from the point of view of the experiences , the growth vertically or horizontally ...
  • Advertising in magazines (online or offline) focused on entrepreneurs.
  • Harnessing traditional advertising (print, radio and television), but especially at the local level where you want to get franchisees, or do targeted advertising on the Internet (Google AdWords and Facebook Ads).
  • Signing up franchise portals. Examples: Franchising Today , ABC Franchise or Franquicias.net .

Advantages and disadvantages of franchising

And perhaps at this point and with this information, you have head a mess and not know if you do or not to franchise your business (or take the franchise one).
Am I better not suit me, I expand, I'm like ...?
Like everything else, you have to weigh the pros and cons, which will differ according to you are the franchisor or the franchisee.

From the point of view of franchiser

Advantage

The main thing is that starting a franchise business will involves creating an extraordinary source of passive income, of which we have spoken sick and lying on this blog. You can grow your business, expand, but also passively as the core business is already created.
By doing this, you can open new markets, reduce investment risk and save a lot in staff costs and infrastructure (imagine that instead of granting a franchise , you have to personally open another branch or local).
Finally, increase brand awareness.

drawbacks

You should make a high initial investment for systematizing and implementation processes in order to reduce the difficulties of communication with the outlets.
You have less knowledge of global business performance and, in parallel, you may experience a small increase in unfair competition.

From the point of view of the franchisee

Advantage

You can position itself in the market and gain prestige with a known brand and a business whose operation is proven.
It will own an exclusive business in your area, where you also suppliers are given and which may benefit from the economies of scale of the chain.

drawbacks

It will not be brand owner that protects your business or have freedom or autonomy in decision-making.
If you want to succeed in your business will depend largely on the smooth running of the franchise and not so much for its management.
You should make a substantial initial investment and pay royalties on a recurring basis (as passive income, but in reverse).

Conclusions. Franchising, franchisors and franchisees

I'm glad you've come this far, and would be glad if you would have been useful this guide.
As we mentioned, if you have a company running and produce benefits, an extraordinary way to generate residual income with it is franquiciarla .
And if you're looking where to invest or what type of business to create, or even if you are looking for a career with a future , perhaps instead of looking for new ideas you can use existing (and proven) and become a successful franchisee . Your economic independence can start there, with a path that has already been initiated by others and you should just continue and replicate.
In any case, whatever is to use your talent and knowledge , both franchisor and franchisee if you are, has great potential for success. And this is true for all people and all places: Spain, Mexico, Colombia, Argentina, Chile ...
Good luck and much success!

Unknown

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard. Google

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