Work is one of the things that must be done for anyone who has entered a productive age. By working, you can earn income that will help you realize dreams like owning your own home. There are many types of jobs that you can try, from working for a company to starting your own franchise business.
Starting your own business or franchise business is a lot of fun. You can learn to organize your own business so that it runs well so that it can generate profits for you.
Even so, starting a business is not something that can be done in an instant and requires a long process and journey. In addition, you also have to learn and know what are the business opportunities that exist today.
Franchise business is a promising opportunity. Learn about the potential advantages and benefits this business model offers for your success.
Have you ever dreamed of having your own business? Become a successful entrepreneur, not bound by time and achieve financial freedom? Franchise business could be the answer! In this challenging business world, franchise business is a promising opportunity for anyone who has the passion and courage to achieve success.
1. What is Franchise Business?
Franchise is a business model that is increasingly popular in various parts of the world, including in Indonesia. Franchise business offers a promising opportunity for entrepreneurs who want to start their own business by utilizing well-known brands and systems that are proven to work.
Franchise business is a form of cooperation between brand owners or companies with individuals or entrepreneurs who want to run a business. In general and in detail, a franchise business is a form of business cooperation between owners of trademarks, products or operational systems.
This collaboration is delegated to a second party who is entitled to obtain permission to use the brand, product and operational system in running a business. In its business model, the franchise business has two fixed elements.
- Franchisor (business owner or franchisor)
- Franchisee (buyer of franchise business license)
As a franchise business owner, the franchisor has the role of granting licenses and sales rights to the business they own, including trademarks, products and operational systems that have been established. While the franchisee is a person or an entity that receives sales rights from the franchisor after obtaining approval to increase profits from the business.
Currently in Indonesia there are also two types of franchise businesses that are generally known by many people.
- Overseas franchise business
- Domestic franchise business
Meanwhile, overseas franchise business refers to trademarks or franchise business products originating from abroad. Usually, overseas franchise businesses have the advantage of having an operational system that is more stable and rarely changes. That advantage is one of the factors that increase interest in running a franchise business.
While the domestic franchise business is usually used as a form of investment to support one's career as an entrepreneur in a relatively short time. Running a domestic franchise business offers good knowledge and experience for beginners in determining optimal business strategies for self-development as entrepreneurs in the future.
In a franchise agreement, the franchisee (franchiseee) is given the exclusive right to sell products or services from the franchisor (brand owner) using a predetermined brand and operational system. In this case, the franchisee must pay an initial fee and regular royalties to the franchisor as compensation for the use of the brand, the system and the support provided.
2. How a Franchise Business Works
In the franchise business, the franchisor grants permission to the franchisee to use proven trademarks, products and business models. Franchisees will pay initial fees, royalties or profit sharing to the franchisor as a form of compensation for these rights.
The franchise business offers many advantages for both parties. For franchisors, they can expand their business quickly without having to spend big capital. They can also earn revenue from start-up fees, royalties or profit sharing from each franchisee.
Meanwhile, for franchisees, they get benefits in the form of well-known trademarks, tested operational systems, and support from the franchisor in running the business.
In the franchise business, the franchisor usually provides training to franchisees to ensure effective business operations. They also provide support in terms of marketing, product development, and business management. Franchisees are expected to follow the guidelines and standards set by the franchisor in order to achieve uniformity in service and customer experience across the franchise's business network.
Franchise businesses can be found in various sectors, such as food and beverages, retail, services, beauty, and so on. Examples of well-known franchise businesses in Indonesia include fast food restaurants, retail stores, salons and beauty clinics.
However, before deciding to get involved in the franchise business, both the franchisor and the franchisee need to do a careful study. Franchisors must ensure that their business can be replicated effectively, whereas franchisees need to understand and evaluate the requirements, costs, and potential benefits associated with being part of a franchised business.
3. Franchise Business Benefits
A business must have a profit goal or make a profit. The same thing can also be obtained through this franchise business. The advantages that can be obtained from doing a franchise business are:
1. Capital and Investment
One of the main advantages of the franchise business is more measurable capital and investment. In conventional business, starting a business from scratch requires large capital and high risk.
However, by choosing a franchise business, franchisees can take advantage of capital that is more measurable according to the size and type of business chosen. This allows entrepreneurs to start a business with lower risk.
2. Famous Brand
One of the main attractions in the franchise business is the use of brands that are well known and have a good reputation in the eyes of consumers. Brands that are already known to the public can provide trust and loyalty to existing consumers.
In the franchise business, franchisees do not need to build a brand from scratch, but can take advantage of the advantages of established brands.
3. Support and Guidance
The franchisor usually provides support and guidance to the franchisee in running the business. This support includes employee training, operational management, marketing, and other aspects related to the franchise business. In the franchise business, franchisees can take advantage of the franchisor's experience and knowledge to build and grow their business.
4. Strong Network
As part of the franchise business, franchisees will also become part of a strong network. This network can provide various benefits, such as access to suppliers, shared knowledge, and opportunities for collaboration with other franchisees. Membership in a franchise network can also open doors for business expansion opportunities in a wider area.
5. Minimal branding
Another advantage that you can get as a franchisee who runs a franchise business is minimal branding or promotion. Usually, franchise businesses already have strong branding in the community, so they are easily recognized and are often the favorite choice for consumers.
With minimal need for promotion thanks to strong brand awareness, you will benefit from running a franchise business more easily and relatively quickly in developing it.
6. Have a professional business partner
When you buy the right to manage a franchise business by the franchisor, the owner of the franchise business will automatically become your business partner. Having experienced and professional business partners is one of the advantages that you can achieve when running a franchise business.
With the franchisor as a partner, the facility or operating system requirements for developing your business are usually provided in advance. So, you only need to focus on running a franchise business in order to achieve profits and develop a stable and strong business.
While running a franchise business, you can also start paying attention to aspects of knowledge about running a business for your own development as an entrepreneur in the future.
7. Proven Success
Franchise business has proven successful in various industrial sectors. By choosing a successful franchise business, franchisees have a greater chance of achieving success in their business. This franchise business model has been tested and developed, so the risk of failure can be reduced.
8. Relatively fast business development
In Indonesia alone, a franchise business is a good investment to make if you have the desire to have a career as an entrepreneur. By choosing a franchise business as your initial venture, you don't have to worry about things like business strategy.
This is because, in terms of planning, operating system and franchise business strategy, the business owner or franchisor has already determined it. So, you only need to carry out the operational systems and procedures that have been informed by you when agreeing to the franchise business cooperation.
Therefore, it is very likely that your business will develop in a relatively fast time. Another advantage is, you don't have to bother preparing products to help increase the valuation of your franchise business. The franchise business owner will usually meet the needs of the business. Most of the time you are only asked to provide a place to carry out the agreed upon franchise business.
4. Challenges in Franchise Business
Even though the franchise business offers many advantages, it cannot be ignored that there are also challenges that need to be faced. Some of the challenges that franchisees may face include:
1. Quality Control
Ensuring that each franchise unit maintains uniform product or service quality and conforms to franchisor standards is a key challenge in franchise business. Franchisors need to have an effective monitoring and training system in place to ensure quality is maintained throughout the franchise network.
2. Market Changes and Consumer Trends
Franchise businesses must be able to adapt to market changes and evolving consumer trends. Franchisors and franchisees need to continuously conduct market research, identify changing trends, and take innovative steps to stay relevant and meet consumer needs.
3. Management of Franchisor-Franchisee Relations
A harmonious relationship between franchisor and franchisee is very important in the success of a franchise business. However, challenges can arise when there are differences of opinion or incompatibilities in managing the business. It is important for both parties to establish good communication, support each other, and treat this relationship as a mutually beneficial partnership.
4. Economies of Scale and Finance
Economies of scale are one of the advantages of franchising, but also a challenge. Franchisees may be faced with high initial costs, royalties that must be paid to the franchisor, and purchase requirements from suppliers set by the franchisor. Effective financial management and achieving profitability is a challenge in dealing with these costs.
5. Arrangements and Regulations
Franchise businesses must comply with applicable laws and regulations. Each country or region has regulations governing franchise businesses. Franchisors and franchisees need to understand and comply with these regulations, such as franchise contracts, trademark protection, labor regulations and taxation.
6. Development and Growth
Another challenge in the franchise business is sustainable development and growth. Franchisors need to continuously develop business models, products and operational systems in order to remain competitive. Meanwhile, franchisees need to face competition in their area and manage business growth in order to generate optimal revenue.
5. Selection of the Right Franchise
Choosing the right franchise business is very important in achieving success. There are factors that you should pay attention to when choosing a franchise. If you choose the wrong one, of course you will lose financially.
Not only that, even the time, energy, and effort you spend will be wasted. Here are some factors to consider in choosing a franchise business:
1. Market Research
Conduct market research to identify opportunities and strong consumer demand. Choose a franchise that is in an industry or sector that has good prospects and high growth potential.
2. Compatibility with Interests and Skills
Choose a franchise that suits your interests, talents and skills. Having a strong interest in the chosen business will help you stay motivated and passionate about running your business. So, your knowledge of this business will be more mature.
3. Financial Evaluation
Carefully review the financial terms associated with the franchise you are considering. Consider the startup costs, royalties, and operating expenses associated with the franchise business. Make sure you have sufficient funds to start and operate the business successfully.
4. Franchisor Reputation and Support
Check the reputation of existing franchisors, including their history, track record, and success in supporting franchisees. Make sure the franchisor provides adequate training, operational support, and guidance to help you run your business.
5. Contract Analysis and Franchise Documents
Thoroughly examine the franchise contract and related documents. Make sure you fully understand the terms and conditions, rights and obligations, profit sharing, and contract renewal requirements.
6. Talking to Existing Franchisees
Look for opportunities to talk to franchisees who are already in the franchise business network you are considering. Ask about their experiences, the challenges they have faced, and the benefits they have had. This can provide valuable insight into the potential of the franchise business.
6. Conclusion
The franchise business is a promising opportunity for entrepreneurs who want to start a business with more measurable risks. By choosing the right franchise business, you can take advantage of well-known brands, proven operational systems, and comprehensive support from the franchisor.
However, keep in mind that the franchise business also has challenges that need to be faced and require effective management. In selecting and managing a franchise business, pay attention to market analysis, signed contracts, and business development opportunities.
In developing your business in the digital era, having website support will help you increase brand awareness online. That way, you can reach a wider audience via the internet. So, to make sure your website is of high quality, it needs to be supported with quality hosting and domains.