The Franchise Business Model
Coming on Thursday 1 Dec 2022 Coming on Tuesday 18 Oct 2022
What is a Franchise Business Model?
Franchise business model is basically a business model in which the owner runs the business by himself. However, there are different variations of the franchise business model.
Franchise business model is a type of business model, in which a small business owner rents out part of the business to another person. This allows them to expand their business and give them a wider platform to sell their products and services.
The small business owner usually provides training and mentoring to his franchisee, and also provides a network of support.
The three types of franchise business model include the franchise chain, the franchise network, and the franchise system. However, each type of franchising business has different pros and cons.
Which is an example of a franchise business model?
In a franchise business model, a company hires a franchisee to run its own branch of the business. Typically, the franchisee is given a small amount of money and assets to set up their branch of the business.
Franchisees have a lot of responsibilities, which include making sure the store runs efficiently, attracting customers, and developing the brand.
Take the example of KFC, Walmart, McDonald’s, Starbucks, and so on. All of these businesses have been franchised to local businesses.
To summarise, it is the franchisee who runs the business but is required to abide by the brand guidelines and standards set by the franchiser.
Benefits of Having a Franchise Model ?
If you are starting a business, you must be aware of the franchising model. It is a kind of agreement between you and a franchise company, where the latter grants you the rights to the business and the brand name and then you run that business.
The advantages of this model include:
- A well-known brand,
- Marketing assistance,
- Training and support,
- Lifetime customer base,
- High income,
- Less competition,
- Better location, and
- More market share.
