Sometimes the most difficult step on the way to business success is developing an idea and a plan for your own business. Although this seems to be an obvious start, in fact you can immediately use an already prepared and proven solution to skip the planning phase and go straight to action. How is this possible? This allows you to run your business on a franchise basis. In short, franchising is a safe business model based on the experience of larger enterprises that decide to share their knowledge with selected entrepreneurs. Individual arrangements between companies are most often included in the franchise agreement.
What is franchising?
Franchising allows new entrepreneurs to benefit from the ideas and solutions of larger businesses. The franchise business model allows you to run your own, independent business based on a franchise agreement concluded between the franchisee and the franchisor.
Franchisee is a person who sets up his or her own business using know-how and a concept developed by another enterprise on the basis of a concluded cooperation agreement. Franchisor is most often a company with an established position on the market that allows the franchisee to operate under its brand, using the technologies and methods it provides. Cooperation offers benefits for both parties - the company lending its image increases its presence on the market, and the entrepreneur gains recognition among customers from the very beginning, as well as ready-made solutions and comprehensive support, which enables rapid development. This is a very popular way of doing business, used by well-known chains such as Carrefour, Żabka, McDonald's, PZU and Subway.
Types of franchise
At the very beginning, it is worth noting that not every franchise looks the same. Much depends on the scope of cooperation, which may include selling goods and offering services based on methods developed by a given brand, but also production work using the systems and technologies provided. Depending on the type of business, we can distinguish, among others: trade franchise, service franchise or production franchise. Most often, we come across retail franchises - stores under the same brand, but operating individually.
Franchise agreement
A franchise agreement is a document regulating the terms of cooperation between the franchisee and the franchisor. It specifies, among other things, the scope of rights and obligations of each party, the benefits received by the franchisee, financial issues and the method of calculating fees, and presents an effective cooperation plan for a specific time period.
How it's working?
A franchise offers more than just the right to use the trademark of a famous brand, the contract usually covers the entire franchise package. In the event of opening a commercial facility on this basis the entrepreneur will receive a business plan that has already been developed, which may specify, for example: the assortment offered in the store (e.g. indication of specific product categories or brands), the principles of organizing and equipping the point, the principles of setting prices, offering promotions or running customer loyalty programs, the method of preparing employees (customer service training or sales techniques can be organized by the franchisor), logistic, technical and marketing support. In exchange for providing the business concept and marketing materials, the franchisee has the right to control the compliance of the franchisee's method of conducting business with the terms of the contract, compliance with the procedures and standards set by the chain, and the achievement of specific sales goals.
Benefits of the franchise system
The biggest benefit of using a franchise is that it provides an entrepreneur ready-made, proven solutions on how to run your business successfully. The franchise offers operation under the banner of a brand that is often already recognizable on the market. If this brand already enjoys trust and gives the customer a sense of security and stability, the franchisee gets rid of the problem of building his own brand from scratch. It also eliminates the need to seek customers' attention, which allows you to save time and money necessary to build your own image.
It is also a great support in everyday activities the opportunity to benefit from the experience of a larger company, which offers a constant level of marketing, training and promotional activities unavailable to individual entrepreneurs. The franchise system gives the entrepreneur the convenience of being independent but with all the benefits of belonging to a tight-knit community. This is a great solution for all those who want to invest in their own business, but at the same time are looking for a way to minimize the risk associated with such a step and are looking for someone who will support them in their development.
Check the offer Multi Food food franchise which is part of the MPT Group, co-created by independent food wholesalers from all over Poland.
