Franchising- The Business Evolution
Franchising has been a popular go-to option amongst entrepreneurs since the mid 19th century, with the famous example of Isaac Singer to the present situation wherein Mcdonalds and Subways have been crafting their success journey globally via this model. A franchise offers numerous advantages of lower risks and investment while providing a higher success rate. The franchise business has the advantage of providing a fool-proof viable business model to new business owners; there are less trial and error. According to the market reports, this industry has been growing furiously.
Traditionally franchising lagged behind other businesses in context to the adoption of new technology and various upcoming concepts. But lately, the race to lead the pack has intensified with the evolving franchising. Franchise business has grown at rates that exceed the non-franchise business growth stats because of the greater success with built-in support mechanisms and the ability to adapt to trends and seize opportunities. The attention being given to the efficiency and commitment to the success of franchise aid in surviving through tough economic times. This is one major reason why most observers believe franchising’s consistent growth trajectory will continue for the foreseeable future. The performance of franchising over the years is the reason it is amongst the first segments to be explored when considering a high return business investment. This is the only opportunity wherein a person with no experience can participate in a system that is proven and odds of being successful are so high.
Franchising Versus Traditional Business:
The type of business model to opt while starting your own business is one of the toughest tasks. Let’s gain some insights into the difference between the two business models:
1) Opportunity & Concept:
The traditional business demands trials and errors which require expertise in each segment of the business. Whereas in the case of franchising the concept is already existing, proven in the marketplace and has less room for errors.
2) Processing & Support:
The traditional business requires a creation for process design and everything needs to be managed and learned by self, no external support at roadblocks. The franchising has tried and tested system and a running process along with this there is full support available from the franchisor.
3) Marketing & Designs:
The traditional business needs new designs from time to time unless and until you get an effectively working design. This testing for various version is quite expensive on the pocket. The franchising saves you in this area as the tested and working marketing designs and collaterals will be provided by the franchisor.
4) Time To Get Started:
The initial setup along with countless trials and coordination of materials, logistics, and finance, etc require a lot of time whereas in the case of franchising one can start business operations immediately.
5) Risk Involvement:
The traditional business relatively has higher risk involved as the business segments haven’t been time tested. Whereas the franchising takes the lead due to the proven and working system which mitigates the risk involvement.
6) Updates & Development:
Single-handed handling in the case of traditional business makes it quite difficult to keep up with the technology and updating as due to lack of knowledge of the business, no external source would be able to help either. The franchising seems more promising as the franchisor provides regular updates and focus on innovations for new upgrades.
7) Business Planning & Training:
The traditional business needs completely device own plans, discover marketing approached and even get the training done. In the case of franchising the franchisee is provided complete hand-holding in all these by the franchisor.
8) Investment Clarity:
The traditional business investment isn’t a clear idea as it seems initially but becomes expensive as there are a lot of trials to get new vendors to associate with less volume. The franchising, on the other hand, is a focused and planned idea due to the full awareness about the initial investment because of the ongoing franchisees.
9) Brand Recognition:
The traditional business is an independent new entity, building brand recognition would take a few years whereas the franchisees can benefit from the franchisor’s brand value and fan base from day one.
10) Challenges & Success:
The traditional business becomes a roller coaster ride with each unforeseen and unanticipated new challenges. This results in affecting productivity and the statistic “ 90% of new businesses fail in the first couple of years” prove the above-stated fact. On the other hand, franchising has an already existing business and success system and focuses on potential improvements. The challenges aren’t faced by one, they are solved by the peer group.
Running own business is a dream come true for many and franchises provide a path for doing so in a low-risk environment. Jugnoo offers the opportunity to open own rides and delivery business in any city across the globe. Trusted in over 20+ countries with 29 million successful transactions worldwide, we aim to empower entrepreneurs with the technical and operational support to make a place in the on-demand industry. To know more about us or to become our partner register yourself at Jugnoo Franchise.