How does franchise model help business to go international?

A franchise is a business opportunity that allows the franchisee (that is you) to start a business legally using franchisor’s expertise, idea, and processes. The franchise business is a business in which the franchisor sells the right to use their business name, logo and model to third-party retail outlets. These are independent third party operators called franchisee.

franchise modelThere are three types of franchise, business format franchise, product or single operator franchise, and manufacturing franchise. Franchising is a common way of doing business.

Franchising model has grown its popularity over the last several decades. The structure of the franchise model can help the business grow in foreign markets more efficiently. It is more cost effective than other expansion models and opening corporate chain outlets.

From the franchisor’s point of view, franchising allows the franchisor team up with local businesses who very well understand the local culture, marketplace and know their territories very well. The new brand has a tremendous advantage as it does not take much time and does not require huge capital to speed up their businesses.

The franchisee (local operator) also provides valuable feedback to the franchisor which in turn can be used to customize the business for a particular market.

There are some challenges if one is expanding internationally. Some are significant and some are trivial. Let us discuss a few challenges one by one.

  1. Language

In many cases, the company training material, operations manual, marketing literature, and website has to be translated. This needs the cost and creates challenges in relation to certain content that cannot be directly translated.

2. Currency

The varying currencies rates and different currency can make the collection of royalties and other fees challenging. This, in turn, can affect the unit’s financial model and the franchisor’s profitability.

3. Supply chain

In many franchise models, the franchisee has to depend on the supply of raw material to operate and maintain the quality of product/services. If there are problems in the supply chain then it can limit the successes of the franchise unit.

4. Some trivial issues

Some less important problems can be the cost and logistics issues that can arise while supporting franchise operators from long distance. Many a time franchisor enters the foreign market even before they are ready for it. It is because the potential franchisee has a strong interest in the regional market. Premature launching in a distant and new market can cause disruption in the whole system which can even fail.

Brands going for international franchisee should perform a complete analysis before going ahead for a foreign franchisee.

Those investing in foreign franchisee opportunity and are new to the market should look into the foregoing challenges if they are addressed or not. The brand should be ready, willing and have sufficient resources for expansion in the region.

Having some structural options, the franchise model can make international expansion more efficiently and appealing for both the franchisor and the franchise in the region. The popular structural options can be area developer and regional developer agreements.

Most countries have regulations which govern the franchise industry. For this, the franchise companies should check with the local government agencies to see that the franchisor complies with it or not.

How to transform your product or service into a brand?

A brand is seen as the company’s most precious and known asset. A brand can be recognized by its logo, slogan, or mark that the general public associates with the company.

create a brandFashion is a fascinating business field and unlike any other field, it is ever changing and highly dynamic. And in such a fast moving and changing industry, to create a brand is a herculean task. But if you adopt some simple points and laid out strategies the herculean task is possible.

Fashion is an industry which is fueled by brands. Is the office colleague wearing an Arrow shirt or Peter England?  Youngsters check out on Instagram which brand they should wear for college farewell party, etc.

It is the potential value of the brand, which not only speaks about the product but beyond that. It represents an image of the company, its people and all stakeholders who stand for it.

We have discussed here a few steps that one should follow and keep working on it to ensure you create a wonderful brand.

Define the brand to create the first impression

It is important that you first outline the brand yourself prior to getting into the reasoning of it. You as a creator and generator of the brand should write down clearly the important elements of the brand. Better write down, as it will get embedded in your thoughts. Essentials like what you wish to communicate with the people, the relation between your brand and your business, etc. are the important things and should be set on high priority.

Take personal interest and be original

Building a brand is one of your business biggest assets. It is often seen that entrepreneurs often outsource brand-building task to some third parties. This should actually be the last thing you should do. A brand is close to your heart, hence it is you who should nurture and grow with your efforts. It is your vision and your mission and not the third party’s which is involved. As a brand is your thought, your vision and mission, therefore it is you who should make all efforts creating, building and promoting it.

Weave a story

Weaving or telling a story is one of the most crucial aspects of brand building. As a human being people are more interested in storyline instead of a just logo, tagline or Facebook share or like. So weave a good story that becomes the script of your brand. The story can be just anything, not necessarily how your brand came into existence. The important point is, there should be a flow in the story and it should be associated with your brand. It is the story which will stay back in consumer’s mind for a long time to come.

Look beyond only sales

A good brand building exercise calls for seeing further than just merely selling the product to the end user. You should be constantly and consistently be in touch with your consumer. It can be after sales service, addressing his/her grievances, feedback about the product, etc. which creates a sustainable brand in the consumer’s mind.

Brand building is a never-ending process and hence you will have to keep on putting efforts continuously and consistently.