- 25 Jun
The most affecting trends in franchise business
Various company may come with a different description of franchise. However, if we dare to look to the simplest meaning of franchise, we will find that it is a proven business method whether in distributing a company products or services. As a matter of fact, franchise becomes the ‘savior’ of the the business world throughout the world when the global economy crisis hit the world in 2008, both in business growth and employment. As an association where franchisors from all over the world gather in one club, International Franchise Association even claimed that in 2013, business franchise area have proven its capability in helping global community by adding more than 180,000 job vacancies. At this amount of the job vacancy, we should be able to predict how helpful this sector is in reducing global unemployment rate.
Last year, the same organization also released their third Franchise forecast of the year. This prophecy speaks about many aspects about global business franchise, but we can simply take some important points from the report.
1. Franchise area is responsible in creating about 10% of global new job vacancies from June 2012 to December 2013. Within the same 18 months, this sector had successfully boosted its own job vacancies to at least 7.5 million.
2. In 2013, within one year only, franchise business has successfully expanded the business to cover more sectors than previous, including business service, personal service, automotive, restaurants, educations, and manufacturing.
3. In 2013, experts believe that franchise sector will grow 200% larger and faster than any industries
4. Experts found that the franchise area is also responsible both for direct and indirect support to all businesses throughout the world, especially in creating more than 17 million new jobs.
After performing specific studies on franchise, IFA comes with one conclusion. There are two different levels of people who play the role in franchise business system: franchisor and franchisee. We can simply describe franchisor as someone who lends his/her business trademark, business system, or trade name to someone else outside the business. At the other side, franchisee means someone who spends an amount of money to purchase the permission to use the franchisor’s business trademark, business system, or trade name. In addition, he/she should also pay a royalty to the franchisor.
People often associate franchise business with a food industry, especially fast food industry. Even though we cannot deny the large number of food industries that run their business in franchise ‘mode,' we also cannot ignore the large number of other industries that serve the same method. IFA records that there are at least 70 industry types from throughout the world that perform this business form. The association itself, along with its network, has more than 1,000 members working as franchisors, 350 product suppliers and more than 6,500 people working as franchisees. Among IFA members, there are 10 franchise companies which ruled the list as the best franchise companies in 2013. They include Hampton Hotels, Jiffy Lube, Subway, 7-Eleven, Supercuts, Servpro, Anytime Fitness, McDonald’s, Pizza Hut, and Denny’s. (Note: please remember that this list does not come sequentially).
Franchise has attracted many companies to move this form for their business that makes it logic when IFA has thousands of members. Under normal circumstance, people will think that there is only plenty business opportunities available in this sector. For this cause, you get the wrong point. Experts from the association claim that even though they have thousands of people signing as members of IFA, it does not mean that all IFA members have taken everything and leave nothing. Instead, there are still many business opportunities available, especially with the latest trend of the global population. At many places, ratio between elders is higher than people whose age is under 50. At its time, this large group will finally need support for their living that also includes home care as well as transportation. For the business, this condition is a golden chance they have been expecting, including for franchise. It is because all human’s primary needs ‘create’ profit. In this case, people need support for their living, including home care as well as transportation.
Besides ‘elder life service,' people have been looking for another profitable possibility for their franchise. People are looking for ultimate food industry that serves foods faster than fast food.
We can almost do everything with technology, especially in optimizing everything from regular to spectacular. In the food industry, we can use advanced technology to help us in serving breakfast, lunch, and dinner quickly and efficiently. However, these benefits also leave us with one question. Is there any technology we know that can offer us both these benefits?
Sometimes, the question may require you to find a pass through complicated process, but it does not apply at this moment. The answer lies around us: food truck.
There are two sides that will get benefits from the food truck: your customer and your business. Food truck allows you to meet your customers without asking them to leave their offices, even though they still need to approach your boat. Once they have got food they want, they can simply pay it and then get back to their office. As you can see, there is much time you can save without compromising your product and service quality.
Like businesses in common, your franchise is not free from the problem, but you still have a good news. In a franchise, most franchisors have already performed some tests before deciding whether to move the franchise format or not. It means that some problems may have already had their solutions. The only thing you, as a franchisee, should do is learning the resources. So, you can save your time from common mistakes start-up entrepreneurs do. This fact is your shortcut to the success, but before you can reach the actual success, there are home works you should do. You should not forget about making interview with your franchisor and your franchisee partners, examining your franchise agreement as well as UFOC (Uniform Franchise Offering Circular), auditing your financial statements, and other relevant franchise aspects.