How to Invest in a Good Franchise Business?
So you want to go into business, but somehow you are still not sure if the business you have in mind would be a big hit. So you asked yourself, ¨Are there any business concept out there which I can practice and use?¨ If you did, maybe the franchise business is good for you.
Franchising is another way you can start a business. If you noticed in the mall corridors, most of the food carts you see are examples of a franchise business. In a franchise set-up, a franchisee is granted the right to market the product or service owned by the franchiser . Under this system, the franchisee can now use the franchise name, trademark, logo, advertising, and the business operation basics by the franchisor. Let´s take a look at the type of franchise that would be best for you.
What are the different types of Franchise Business?
There are two different types of franchising – product franchising and business format franchising. Product franchising – also known as trade name franchising, is that type of franchising wherein a manufacturer grants a franchisee the right to sell its products, but with no method of doing business. Examples of this type of franchising are dealerships and service stations.
The second type is the Business format franchising which is also identified as a name and process franchise. This features a broader and ongoing relationship between the franchiser and the franchisee. Aside from granting the right to use the name and market the products and services of the franchiser, the franchisee is also provided a complete plan for managing and operating the business. This is how a franchiser transfers to the franchisee his proven business concept. This plan often includes a full range of services, including site selection, training, product supply, marketing plans and even assistance in obtaining financing. Furthermore, all of the franchiser’s operating systems, technical expertise, marketing systems, training systems, management methods and essentially all relevant information, are transferred to the franchisee.
Are you interested to be a franchiser? Visit the Philippine Franchiser´s Association Franchise Finder to get started in a franchising business.