Guest Post: Carol Haas, Esq. | Boca Raton, Florida
The CBS TV program “Undercover Boss” about business leaders and their relationships with their employees and/or franchisees has taught many viewers about some of the strengths and weaknesses of the franchising system of doing business.
It is not unusual for a franchise company to be spotlighted on “Undercover Boss” weekly episodes.
These programs demonstrate how the franchisor and franchisee have responsibilities to each other. If both parties fulfill their responsibilities, a win-win situation is created and both sides of the franchise company enjoy a profitable, rewarding business.
What makes a franchise company an appealing investment?
One of the most compelling reasons to become a franchisee is the franchise company’s brand awareness.
Typically, a franchise company is formed because the prototype has become successful and built a devoted following. Instead of starting from square one, the franchisee can enjoy offering products or services that already have a solid, positive reputation.
Often, the brand already has a trademark or service mark, which brings even more value to the franchise company.
Another benefit of investing in a franchise company is marketing expertise. The franchise company has already determined who its customers are. Plus, the franchise company has developed cost effective marketing campaigns to reach these target customers through advertising, public relations, promotions, community outreach, customer loyalty programs and social media.
Franchisees also enjoy enhanced buying power through the franchise company. Usually, a new business owner has a weak bargaining position when negotiating with vendors. However, a franchisee can draw on the vendor relationships the franchise company has established over the years.
Additional benefits of investing in a franchise include: pre-opening training; guidance in site selection, lease negotiation and facility design; additional training throughout the term of the franchise; on-going support; and research and development. All these advantages make a franchise more likely to succeed than an independent business.
The franchise company also provides substantial benefits for the franchisor, including using other people’s money, skills and energy to grow the business concept; income from royalties; profits from sales of products and services to franchisees; and possible income from real estate development.
“Undercover Boss” has demonstrated if the franchisor and franchisee work together and keep the lines of communication open, both can enjoy success through the franchise company.
If you would like to speak with one of our franchise consultants today, please don’t hesitate to call (706) 356-5637!