Should you choose the franchising route or continue with the company owned stores?

If you consider franchising option to be the best to sell your own manufactured stuff, think again. You might be mistaken.

Franchising set up for your business may not be as easy as it seems to be.

There are lots of intricacies involved in a franchising route and how well you are prepared to cope with it is what matters.

Why would you choose to sell your goods through the franchise route if you have enough funds in your coffers?

A company looks to select the franchising option

a) If it wants to expand to places where it cannot have its own stores.

B) If the company doesn’t have any added funds and it looks to expand to far fetched areas, then selecting the franchising option is probably the best way to sell its goods. But what if the company has money to run its own stores?

It’s important to understand the need of a franchising set up.

As an entrepreneur if you seek to expand, then you might look ahead and choose franchising as an alternative.

But why do you need to go in for a franchising set up? Is it only because franchising eases your work load? You don’t need to worry about your franchisee who sells your goods.

One must be aware of the disadvantages of a franchising set up.

A franchisor should be very careful when it picks a franchisee.

Many franchisees collaborate with a franchisor to add another brand tag to its kitty.

The franchisor should be careful with those investors as they tend to focus on other businesses and take advantage of the brand association in a negative way.

These opportunist franchisees should be avoided at best.

A franchisor also suffers from the fact that it has little control over the franchisee if he is located at far flung areas.

A franchisee business services could be of poor quality, which is damaging to the franchisor’s reputation.

A franchisor may not know the exact details of the business operation of the franchisee and therefore the franchisor is advised to be careful while it selects a franchisee for its business goods.

The biggest disadvantage that a franchisor faces is the use of the brand association by the franchisee well after it dissociates itself from the franchisee.

It could be damaging to the company’s reputation and it also gives undue and unethical advantage to the franchisee.

A franchisor should always continue to have its own company stores in places where it’s feasible for them. It should avoid partnering with a franchisee if it has the money to open its own stores.

A company who is cash strapped could avail the possibility of partnering with franchisees, but should be very careful on selecting a proper franchisee.