Why join of a franchise?
Spur is a franchise, and so is Wimpy, McDonald’s, KFC, Steers and the list runs into the hundreds in South Africa. If you enter a store that you can find anywhere else in the South Africa, you’re probably in a franchise (there are few exceptions where some franchises only operate in Gauteng).
Opening a franchise gives a confidence to go into business for yourself, but not entirely by yourself. A franchise offers the franchisees a certain level of independence where they can operate their ”own” business. A franchise provides a reputable product or service which also gives the store a widespread brand name recognition. This also adds value to the store should you consider selling your investment at a later stage. A franchise increases your chances of business success because you are associating with proven products and methods.
In a nutshell:
You buy a franchise. The franchisee (you) then pays an ongoing franchise royalty and sometimes marketing fee out of your sales to the franchisor in return for the ”know how” and ongoing support. There are however some franchises like the Max Box franchise that have re-invented themselves by offering a royalty free franchise and solely make money from delivering stock to their stores.
”You don’t have to spend a lot of time and money running after your own prints, product testing, photo shoots, design etc it’s all being done for you! Generally speaking people struggle to run one store efficiently, never mind managing their own brand.”
Advantages of buying a franchise:
- Be your own boss. Buying a franchise and becoming a franchise owner is a good way to eliminate ever having to deal with a tough job environment.
You will have to deal with the franchisor and follow strict instructions. For example, if you own a KFC, whilst you might be in charge of the hiring and firing of employees, you will not be permitted to change their logo to a green colour. But that’s a good thing. You don’t buy a franchise because you want to change it. You buy it because it’s a tested and tried business model!
- Steady supply chain. The franchisor can tap into bulk supplier discounts which is off limits to individual stores. Quality and consistency on products.
- Minimize risk. The advantages of going into franchising are that you have the experience of the franchisor and the system’s established franchisees who can guide and support you along with training models from those who have run the business and succeeded.
- Get questions answered. You have opportunity to ask as many questions as you want and to network with fellow franchisees, therefore solving challenges or issues.
- Landlord approval. Landlords want to fill their empty shops with stores that attract shoppers to their malls. Many landlords nowadays insist on a franchised store, because they know that the franchisor will put all measures in place to provide a smooth operation and brand development on the long run.
- Site evaluation. The franchisor provides help in locating and securing store locations for the individual franchisee. Location is key!
- Name and ”Know How”. The franchisee benefits from operating under an established and respected brand name.