BUSINESS FRANCHISING: Considering a Master Franchise
BUSINESS FRANCHISING: Considering a Master Franchise
Thinking about buying into a franchise system, it is important that you understand exactly how franchising works, what fees are involved and what is expected of you from the franchise outfit.
An individual who contracts and run a franchise is called a "Franchisee". The franchisee purchases a franchise from the "Franchisor". The franchisee must follow certain rules and guideline already established by the franchisor, and in most cases the franchisee must pay an ongoing franchise royalty fee, as an up-front, one- time franchise fee to the franchisor. Franchising has become one of the most popular paths of doing business in today's market space. In most major cities you cannot drive three blocks without seeing a nationally recognized franchise company.
Brief Account of Franchising
Franchising begin back in 1850's when Isaac Singer invented the sewing machine. In order to distribute his machine outside of his geographic area, and also provides training to customers, Singer began selling licenses for entrepreneurs in different parts of the country. In 1955 Ray Kroc took over a small chain of food franchise in the world, now known as McDonald's currently has the most franchise units worldwide of any franchise system.
MASTER Franchise is an agreement on acquisition of franchise across international boundaries and covering the control of the whole of a national territory. If a company acquires say a franchise for the territory of Ghana, it becomes the master franchise. The company could divide the country into territories for the purpose of selling the franchise locally and expanding its market presence. This is often the case as the need to consolidate the market growth.
The master franchise holder appoints area franchisee one of the rights and responsibilities that go with developing the franchise in Ghana.
Finding a master franchise could be an arduous task, however there are so many means to do this. You could make enquires through the National Franchise Association which has a tab on it members activities. You could also visit a trade show or expo where there one. Embassies and trade office in other countries could be helpful in terms of making information available.
Foreign embassy or trade office in your own country could equally be useful. Other possible sources of information are trade missions, referrals, the internet and advertisement seeking franchisees.
In acquiring or wanting to be a master franchise holder, there are issues you most consider. These are issues that have to do with the legal and regulatory environment, import rule and custom procedures, corporate taxes, cost and availability of labour.
Further consideration is the purchasing power of the population, economic and political stability, current situation analysis of franchise in the country, difference in language and cultures, sources of financing and a business plan.
You have to be guided by the level of intellectual property protection and enforcement. You also need to worry about availability of skilled labour and cost of training. The success of the franchise will depend largely on the ability of the population to purchase goods and services and the cost of your products or services.
Investment is known to surge in the direction of countries with economic booming. They pose less risk for business. In considering a master industry in the country. Differences in language and culture are possible disruptive factors when negotiating and considering the product or services. The truth if you will succeed in Nigeria food market space (Ready to serve) foods, then you must be local delicacies inclined. An offering does well in liberal society may probably not be accepted in a country with particular religious tendency.
Strength of Buying a Franchise
There are many merits to buying a franchise:-
- Corporate Image: - The corporate image and brand awareness of the company is already established. Consumers are always more comfortable purchasing items from a familiar name or company they trust.
- Training: - The franchisor usually provides extensive training and support to the franchise owner.
- Savings in Time: - Since the franchise company already has the business model in the place you can focus on running a successful business. It is a great way for individual to own business. If you are thinking about buying a franchise, do your homework, research the company and you consult franchise attorney before making final commitment.
Moral tales
What do you do when you realize that your family members are leading separate lives, eating meals on the go or watching TV while chowing down on takeout? Keri Willenborg and Cher Stenger of Omaha, Nebraska quit their jobs. Of course, they still needed to make a living, so they took a chance on a unique business concept.
Willenborg knew she wanted to start her own business to spend more time with her family. She considered getting into art for children. She was still mulling over ideas when she attended the Super Bowl in San Diego with her husband. As fate would have it, a group of women sat near Willenborg and struck up a conversation about once-a-month cooking. Intrigued, Willenborg asked them elaborate.
"When I got home from the Super Bowl I researched about once a month cooking," said Willenborg. "It turns out that my great aunts were doing this in farming communities. It is very common in rural farming communities."
Regardless of how things used to be, these days' families are on the fast track, with little time for recreation let alone remembering to pick something out for dinner (not to mention shopping for all the ingredients). This very reason is behind many franchisees' motivation to go into business for themselves. Willenborg took it a step further when she and her business partners started their own business, while helping hundreds of other busy professionals out of the increasingly common dining "rut."
"There is a disconnect there," Willenborg said. "People want to eat home cooked meals every night but don't have the time to prepare them. I was raised to eat dinner together with my family every night and I'm 33 years old. The same thing for my business partner and husband. It's not just an Omaha thing and it's not just my demographic. Kids today have a lot of activities. My 18-month-old has more activities than me. That's the way the world has changed.
In June 2003, Willenborg and her partners founded Supper Thyme, originally Omaha Supper Thyme, the nationally expanding franchise company. Supper Thyme is a meal preparation company where customers, who are generally busy career women, prepare meals in advance in a state-of-the-art kitchen. "There are stations and they [customers] rotate from station to station preparing meals they have pre-chosen on our website. We provide the pots and pans, containers and laser printed recipes."
But it wasn't always so streamlined. When Willenborg and her partners decided to try the idea in the real world it was not the polished operation that is today. "We set everything up in a friend's cafe that had 16 booths," Willenborg said. "We brought everything to the cafe and put labels on the booths and invited people to test it out. We knew it would never work, it was a nightmare, it wouldn't have even passed with the health department. I wanted to cry, I was depressed and deflated."
Fortunately no one was willing to give up. "We were all passionate about the concept but we just couldn't do it in the cafe. If we were going to do this we would have to do it big. We had to lease a space. It was a calling and we all felt so strongly that there was a need for this concept. We were in a facility within a few weeks."
Willenborg and her partners wanted to jazz up the old tradition of once-a-month cooking. "We commercialized and modernized an age-old way to cook." Willenborg said. But instead of cooking up casseroles in a church basement, they invited the community to their vibrant, fun-filled full-equipped kitchen to prepare meals for their families in a dynamic environment. "Women want it to be fun, an experience, something to look forward to."
Even though the idea of preparing meals in advance is not new, it was relatively unknown in more metropolitan areas, which presented some obstacles in the beginning for Willenborg et al. "It [the concept] wasn't well received at first" said Willenborg. "People didn't understand--they truly didn't get it. A lot of people thought we were a cooking school."
To overcome this challenge, the Supper Thyme crew started hosting open houses to educate the public about the process. The idea was to get them familiar with the concept and to taste the food. "People got to taste samples of the food and cook a meal that they took home."
Willenborg employed other aggressive marketing tactic to get the word out about Supper Thyme. Her marketing experience played a key role in the concept catching on. Drawing on her adept marketing skills, she positioned herself a family dining expert by talking to schools and parent groups. All of her business partners brought something unique to the table, which contributed to the success of the rapidly growing company.
"My partner Cher has a background in management, my husband in finance and management, and he's also good with computers; he handles the website," said Willenborg. "We've all been successful in our former businesses. Having a business background helped when we started out."
As the idea caught on Willenborg started getting calls from around the country from people interested in buying a franchise. At first she and her partners shied away from the idea. "But the more we were asked about franchising the more we knew we were on to something."
To make Supper Thyme into a franchise company Willenborg and her partners knew they needed outside help. We hired FranCorp. They gave us a successful blueprint for franchising our business," Willenborg said. "They were truly instrumental in our success. They helped us with the legalities and red tape."
Overall, it took 16 months to complete the process. In the meantime, similar concepts were popping up and franchising and franchising at a faster rate. "I'm glad we grew slowly so that we could accommodate the growth. Now we have 14 stores."
Surprisingly, Supper Thyme's original recipe database consisted of all of the partners' family recipes. Today, Supper Thyme has a chef who keeps their database fresh and innovative with entrees like apricot glazed crusted chicken and stuffed bell peppers.
One of the most important considerations when thinking about buying a franchise is the level of training and support the franchisor offers the franchisee. As a Supper Thyme franchisee, you'll get individualized attention from Day 1.
"We work with them week by week," Willenborg said. "We help them place yellow page ads, get permits, work with health departments-everything down to the signage on the front door. We provide training on computer and reporting systems, inventory, ordering food, and marketing. I work with franchisees individually on marketing and help with PR for the initial grand opening. We offer moral support for the grand opening because no matter what, the first week is crazy."
For those thinking about starting their own business, it takes a winning combination of determination, uniqueness of concept, demand, adaptability, location, trial and error and a lot of luck. As a franchisee you sidestep many of these factors because they've already been done for you. This may explain why franchise businesses are generally more successful in their first year than independent businesses. But sometimes a good idea is all it takes to launch a successful business.
Astounding truth Chicken Republic a fast food catering lead by a self- starter Mr. Deji Akinyanju, he had a franchise deal with Chicken Licken South Africa with the huge growth they had in the Nigerian Market Space for fast-food; haven already planned his exit strategy from such an alliance. After a period of time they had gain experience-cure on fast food services. Akinyanju had to rebrand and exit the franchise from the franchisor (chicken licken).
Over the years, having started Chicken licken which is a brand from South Africa, we have learnt a lot about the customer needs references and taste profile here in Nigeria. As a result consumer response to our enquiries, we have decides to be more flexible and provide consumer with a brand that adopt to local food profile, even as we are conscious of quality and the different taste of the people. The company is aiming at rolling out 1,000 chicken Republic Stores across Africa over the next 5years and they have already started driving this objective with the opening of their first Chicken Republic in South Africa in November last years.
Truly, you may need to inquire question such as, Do I have an approved source of financing? Do I have a good business blue print? Without financing and a road-map, that present the what, how, why, who, and where, you are probably headed in the wrong direction. Danger! Pitfall ahead.
There are master franchises in Nigeria such as KFC, AVIS, COCA COLA and SPAR. There companies have to cope with the difficult operating environment...
By Moronkeji Oluwaseyi Ibrahim
Take it from me; I may not be a Doctor but I know how to heal deal
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BUSINESS FRANCHISING: Considering a Master Franchise
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