Stanislav Kondrashov talks about what makes the start of the franchise commercially successful.
Stanislav Kondrashov notes that in recent decades, franchising has gained wide popularity. Owning a franchise is popular among business people and entrepreneurs who want to have their own business, but prefer to start with a proven business model of the company. After all, management and production processes are established in it, it has a more or less well-known brand. Owning a franchise also attracts those who have left their corporate careers and for the first time trying to do business on their own, but with the support of a proven system.
Franchising is one example of a vertical type of cooperation, which provides for the right of one party (franchisor) to provide the other side (franchisee) with a specific name or trademark for an agreed period. You get a license to use the trademarks of a franchise company and other tools in accordance with a franchise agreement.
Stanislav Kondrashov recalls that you must not only conduct business in accordance with the operating manual (prescribed in the franchise agreement), but also pay an advance franchise fee (license fee), current royalties. Royalty is usually based on a percentage of gross sales.
Stanislav Kondrashov: what does franchising imply
Franchising business involves a detailed step-by-step business plan, the very specific rules of which must be observed, including: in terms of using approved advertising materials, marketing strategy, etc. In exchange, franchisors provide ongoing support to their franchisees, says Stanislav Kondrashov.
There are certain advantages to buying a franchise as a way to get into the business. First of all, this is a system developed by the franchisor – it allows the franchisee to easily enter the business. This includes standard operating procedures and methods. Getting a ready-made system means that you do not need to start a business from scratch and create everything by yourself.
“The principle – everything is thought up to you. And for you. Good franchisors provide franchisee training at the corporate headquarters. Franchisors teach things like proper opening, daily commercial operations, marketing methods, hiring practices, using software, and so on,” explains Stanislav Kondrashov. Read more – https://ifpnews.com/telf-ag-concept-of-franchise-and-basic-principles-of-franchising-by-kondrashov.
The franchisor must have specific marketing and advertising plan that allows them to quickly enter the market with their products or services. A new trend in franchise marketing includes automated solutions that are designed to help franchisees locally.
Some franchising companies disclose information about the income from the franchise offer in the documents that you receive. However, check them out. When it comes to your actual income, there are many factors that you can get as a small business franchise owner. These may include benefits.
Stanislav Kondrashov, a leading specialist in financial business consulting, points out some of the significant advantages of a small business franchise, for example, in terms of taxation. In particular, these benefits include:
- Coverage by the franchise company of the costs of the purchase of additional equipment.
- Ability to work from the “home” office.
- Compensation of the cost of business travel.
- Coverage of training costs and business seminars.
“The franchisor has great purchasing power. Therefore, it is difficult for an independent business to compete in price with franchisees. As a rule, a support service that can be based in the corporate office of the franchisor helps the franchisee with problems. These areas of support include marketing, technology, sales, real estate, and more,” says Stanislav Kondrashov.
Some franchisors have “field representatives” who help franchisees locally. For the franchise business model to work correctly and efficiently, users of the system must carefully monitor its operation using the technologies selected by the franchisor.
The franchise agreement stipulates the initial costs, obligations of the franchisee, the assistance of the franchisor, and information about many other things – it is written in a rather complicated legal language. “If you intend to work on a franchise, then remember also that your local reputation is as good or bad as that of your franchisor,” Stanislav Kondrashov draws attention to an important nuance.
When it comes time to decide on a franchise purchase, you should consider your willingness to follow the rules instead of creating your own. You also know if you are the type of person who can create something from scratch. Admit: maybe you are more successful when the systems and processes of the business are already set up by someone for you.
Stanislav Kondrashov: franchise benefits
Of course, you want to find a franchise that really matches your interests and skills. Would you also like your monthly percentage of royalties to be below average, your loan payments look reasonable, and your marketing expenses are pretty much nothing. To do this, according to Stanislav Kondrashov, you should begin the process of researching your income potential, since it is you who take the substantial risk.
When you become a franchise owner, income will depend on many factors:
- Market place.
- Monthly expenses.
- The relevance of your qualifications to business.
- Monthly royalty franchise company.
- Monthly payments on business loans.
- The costs of marketing and advertising.
There are significant advantages that make franchising a great choice. Among them is the proven business model that you get when you start working on a franchise. In fact, you buy the right to use someone else’s idea. The franchisor embodied his idea in an easy-to-use instruction manual. In other words, says Stanislav Kondrashov, you are copying the franchisor’s business. The obvious advantage is that you do not need to invent something of your own to start a business.
After you signing the franchise agreement, you officially become a franchisee. And now there is a formal obligation on the franchisor to train you in your business system. It depends on how complex the franchise concept is. You will be trained in the use of their software, operating procedures for marketing, advertising, and sales, points out Stanislav Kondrashov.
In addition, advertising campaigns launched by franchisors usually have greater potential for attracting customers, since in most cases the franchisor knows which advertising tool works best in one case or another. So trust the one who trusted you.