Are you ready for Franchising (2) – The Franchise Perspective

I hope you would have read our first blog in this series http://magneconsulting.blogspot.in/2014/01/are-you-ready-for-franchising-1.html

In this segment we will try to lok at Franchising from the Franchisee perspective.   A very important term which always gets missed out in the Franchising glossaries is ‘Who is a Franchisee’. After meeting and talking to a good set of Franchisee’s over the last 1 year we can safely define that – A Franchisee is an entrepreneur woo is  willing to invest his Human, Financial, Knowledge , Network capital on a Brand.

The reason why a Franchisee takes such a decision is because he feels that his entrepreneurial instinct and his objectives will be fulfilled in much lesser time if he joins a Brand bandwagon as opposed to creating a Brand on her own. Sounds easy so far, so where is the challenge Just like Marriage franchising too is a formal model of a relationship which is built on the promises of Giving to each other and just like marriage it is difficult as after the honeymoon period the ‘Giving’ gets replaced by ‘Getting’

So when a person decides to take up on a Franchise he has to be very clear on the Capital he has in hand and when we say Capital we mean Financial, Knowledge …. He is joining the brand bandwagon because he expects that the kind of interface the Brand will bring to the table will be complimentary to his investments and in totality it can enable him to achieve the targets he has set for himself.

So when I as a Franchisee would go to have the first level discussion with the brand owner I would like to understand the Brand Owners reason for franchising which could be any one of the following (it could be something very different than what is listed here)

-          Successful Model which can yield benefit just on expansion ( economies of scale)

-          Competitive Strategy

-          Need for quick fund or worse looking into Franchise as an alternate revenue model

-          Others

For sure the Brand Owners Objective being ‘Need for quick money’ would mean that you as an Franchisee or investor needs to be extra cautious to validate every aspect of the business before signing on the dotted lines. The first validation is

Whether the business is Measurable & Scalable

Keep watching this space for more and drop us your feedback at reachus@magneconsultingcom

Are you ready for Franchising (1)

It was in March last year when a client of ours had given us a call and enquired ‘Can MAGNE help us in Franchising’ and I living with the spirits of MAGNE to explore a new opportunity had said ‘Yes’. Never realized that a small conversation would lead us to one thing after another and finally it was in November 2013 when I landed in Delhi (Pragati Maidan) to be a part of Brand-Franchise expo (http://www.franchiseindia.net/)and for the first time felt that we are in touch with something which would have a deep impact on the business ecosystem ( or may be the whole phenomenon has already begun and we could only sense it when we became a part of it )

Once the awe , research and understanding of the Franchising basic was done the inquisitive MAGNE brain started popping up with all kinds of questions and one of the most important one was that whether Franchising is just another thing to be seen on the Hype Curves or is it really meaningful ( I know this might seem to be the most dumbest doubts raised when so much has happened and is happening in the Franchising spectrum but then again we as an organization have always  prepared ourselves by deliberating on things than agreeing to whatever is happening around) . We understand that say for an international brand ABC which has the right model to penetrate India, franchising would be a potential route as they would ideally give their territorial rights to a Master Franchise who in turn will expand the brand in India but then what is the key driver behind every retail brand small of big trying to be a part of the Franchising bandwagon

A little deeper introspection would give us a very key aspect of franchising which is generally missed out and that is franchising is a marriage of complimentary skill sets which in turn can make a local brand grow exponentially in a few years time. The scale requires Location, Products/Services, manufacturing abilities, consumer connect and so much more and it becomes a very difficult proposition to have all of this in one go and so the need to have more partners on board , a dimension which Franchising  brings to the table

Keep watching this space for more and drop us your feedback at reachus@magneconsultingcom