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
