What is the franchise model?

What is the franchise model?

You may have heard the term ‘franchising’, you may also be familiar with big name brands such as McDonalds engaging in the franchise model, but what does it actually mean? So what is the franchise model? And why would you consider this business model when looking to start your own business? We have the answers…


what is the franchise model?

What is franchising?

Franchising is a model of doing business where a person (the franchisee) has the right to use an existing company’s brand and mode of operation for an agreed fee and period of time.

In simple terms; a business that has a successful model and recognised brand (the franchisor), offers the opportunity for others to be part of this success and reputation. In return they grow their business with like-minded individuals with the extra capital the model affords.


The benefits of the franchise model

The Benefits to franchisees are many; franchises have a higher chance of success than a start up. This can be due to the fact it is a tried and tested model and you have the support and extra experience of mentors.

You will likely be able to start a franchise at a lower cost than if you were to start a similar business alone. This is due to the fact that the franchisor will have existing trade and customer relationships and staff already on the payroll. Additionally they should have a good website and joint marketing, as well as an existing customer knowledge, base and reputation. It is also likely to take a shorter time to launch a franchise due to these points and the existing structures already in place.

Business planing and forecasting is hard. However with a franchise you get a more accurate cash-flow and business plan. Furthermore, you are much more likely to receive funding on a franchise than a start up as it will have a trading history. Additionally, an existing franchise network proves the model to a bank or investor. Also the facts and figures are more likely to be more accurate than guesstimates created on start-up companies.

Having the selling power of a known and trusted brand gives a new franchisee the clout and customer trust of a much larger company. This can include the benefit of reviews, existing brand awareness, as well as the kind of guarantees larger companies can offer. For example Just Shutters franchisees benefit from being able to offer their customers a lifetime guarantee. Something that could be very costly to implement for a new business, but a standard for our company.

The use of an established model; this is a very salient point! Do you ever wonder why some businesses succeed while others in the same niche fail? A fine tuned business model encapsulates everything from how much you spend on marketing (and where you spend it); all the way through to how much you pay staff and the recruitment and training process. Don’t forget supply chains, pricing and the 1000 other things you must balance in a company. Many times the existing company will have made costly mistakes the franchisees will be able to avoid; just ask Just Shutters about radio advertising!!

Staffing: depending on the franchise you may have the benefit of a fully staffed head office; taking calls and keeping diaries. Also dealing with appointments and customer service functions. This could be something a start-up would not be able to afford, but with a franchise this can be a huge benefit.

Other benefits can include: lower product costs through group purchasing and deals. Group and well placed individual advertising campaigns. A marketing department specialising in the field. Lead generation through an existing, well optimised website and ongoing support and training.


Is a franchise business mine?

The individual franchise will be yours. You will be responsible for the day to day running of the company but there will be rules in place that should be adhered to, to help guarantee the company, product or service remains with a constant standard across all franchises, and to give you the best chance of success.

The franchise contract will be for a certain territory. Usually exclusive (always exclusive if you take on a Just Shutters franchise), and for a certain time frame. Discuss these terms with your potential franchisor. With most franchises there will be leeway in terms of the length of contract and some of the terms.


The Just Shutters franchise opportunity

Just Shutters would be delighted to tell you more about our exciting franchise opportunity. Please call 01202 233744 or fill in the form on this page for more information.