It is a business model that combines the best aspects of sole proprietorship and corporations. It is a Hybrid model that fills the gap between working for a company and working for yourself. So, in a way, you are an employee as well as an employer. According to the International Franchise Association, it is a unique method for distributing a product to its consumers.
Franchisor and franchisee
To make this model useful, both the franchisor and franchisee have to play their part perfectly. It is often said that franchising implies working for yourself, but not by yourself. It has benefits for both franchisors and franchisees. Franchisors can expand their business using other people’s investment, and franchisees get a higher chance of success than in sole proprietorships.
It has a lot of history
Franchising is being used since the 1800s in countries like Germany. The pub owners in European countries used their reputation to increase their sales. They allowed other businesspeople to use their name and trained them to provide high-quality products. In a way, the concept of the franchise business model came into existence because of them.
Franchising offers its workers economic stability and gives them the opportunity of becoming independent business owners. It increases brand awareness, which in turn has a plethora of benefits for all the parties involved.
Understand the modus operandi
A franchisee will make sizable profits because bulk rates are always created by the franchisor. It reduces workload and increases the chances of increased revenue. When someone starts franchising, they should check their net worth, create a plan, and speak with other franchisers.
A franchiser should also try multi-brand franchising to avail more significant benefits. They should make a specific budget and analyze costs for operating a business. Besides, hiring skilled people, proper training will make the franchiser successful and the company highly profitable.