If you want to earn good profit in business, then it is really important to choose a business in which Sell is very good and Margin is also good. But at present it is really difficult to find such a business idea which has both Sales and Margin. This is one of the main reasons that people who have good investment in the present time, instead of opening a new business, they take the franchise of a big company, that is, they focus on the franchise business.
If you do not know about Franchise Business, then read this article completely because in this article we will tell about ‘What is Franchise Business – Their Business Model and Advantages and disadvantages.
What is Franchise Business?
Franchise business is currently considered one of the most profitable business. For those people who have good money to invest and want to earn good profits from the very beginning, for those people franchise business remains a great option. In the franchise business, the businessman or if it is said, the entrepreneur officially takes the license to sell the products and services of another brand and earns profit by selling the products and services of that brand.
Toyota’s way to success : Franchising
For example Toyota is a brand but it has showrooms in every city which sell its products and services. Toyota franchise does not establish itself, rather people take franchisees of companies and earn profits by selling their products and services. The company gives franchisees to the people for its expansion and to earn more profit. Franchisees can be of many types which include manufacturing, sales and services etc.
Mainly the big brands and companies that have established themselves, they know about them and believe in their products and services, then it is easy to earn profit from them. After taking their franchise, entrepreneurs are able to sell their services and products officially. Entrepreneur has the right to sell products with the company’s logo, trademark, business model.
What is a Franchise Business Model ?
Franchisee business is considered to be one of the most profitable business in the present time, the main reason is that once a good investment is made, then the company whose franchise is being taken has a good margin from the beginning on the basis of its brand value. and cell can be obtained. At present, products and facilities of different companies are available in every city, the main reason is that people take franchisees of those companies.
We have given you information about what is a franchise business, but it is also important to know that what is a franchise business model, that is, how does the franchisee earns the brands and how the franchisee earns money by taking the franchise. So let’s talk about that too.
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When a brand or company gives a license to a businessman to sell their products with his name, logo and trademark, then in a way, he gives his franchisee to that businessman. For this, the brand or the company charges a substantial fee in the beginning to take the franchise from that business. Apart from this, the businessman also has to pay an annual fee for taking a franchise. Apart from this, the company earns money by selling the products.
Now if we talk about how a businessman taking a franchise earns money by taking a franchise, then it depends on the business model of the company. Mainly on selling the company’s products, the person taking the franchise gets a fixed margin. That is, if he sells more products then he earns more and if he sells less products then he earns less. The companies themselves provide the products to the person taking the franchise.
Advantages and Disadvantages of Franchise Business
As we all know that any business has both advantages and disadvantages, so there are some great advantages and disadvantages for a franchise business, which are as follows.
Advantages of Franchise Business
Profits from the beginning: The most special or beneficial thing about the franchise business is that it can be earned from the very beginning. When you take a franchise of a popular brand, then on the basis of its brand value, you get sales from the very beginning and many franchisees give very good margin to the franchisor, then by earning good margin in more sales, good profits can be earned from the beginning. Is.
Complete training of business: A special thing about the franchise business is that you quickly take the franchise of the company, that company guides you how to make less profit and how you will be able to earn more profit. Most of the franchisors give training to all those people who take franchisees from them before taking them. In this training the complete business model is explained and the businessman is told how he will earn profit.
No Marketing Expenses: When you take a franchise of a company, one of its big advantages is that you do not have to spend any marketing expenses. Companies spend crores of rupees on their marketing and brand value and this is the reason why their products sell fast. In such a situation, when you take a franchise of a company, then you do not need any kind of marketing because those people already know about the company.
Disadvantages of Franchise Business
Franchise business is one of the best business models in which good profits can be earned from the very beginning but it also has some disadvantages, which are as follows:
More Investment: It is absolutely true that if an entrepreneur takes a franchise of a brand, then he can earn good profits from the very beginning, but it is not so easy to take a franchise of a brand. To get a franchise, you have to pay a lot of money to the brands. If we talk about India, then many domestic and foreign companies give franchise to a person after taking crores of rupees. But it also depends on the company because many companies give franchise even in low investment.
Higher annual fees: When a person taking a franchisee sends the company’s products, the company earns profit in it, but at the same time, the company takes annual fees from the person taking the franchisee, which in most cases remains very high. Apart from this, companies that do not take commission on profits from products and services, they charge very high annual fees. This annual fee can be fixed or can range from 4 to 13 percent of sales or revenue.
If a person has a good investment and wants to earn good money by starting business, then franchise business is really a great option for him but very few people have ‘full knowledge of Franchise Business’. This is the reason why we have prepared this article in which we have told about ‘What is Franchise Business’, ‘Business Model of Franchise Business’ and ‘Advantages and Disadvantages of Franchise Business’. Hope you liked this article and proved to be informative for you.