Franchise is a method in the distribution system of goods or services. This method establishes a model of business relationship between Franchise (business owner) and franchisee (owner of capital or investor) .Franchise is a form of business duplication that has been successful and has a well-known brand. Thus prospective investors who want to buy a franchise do not have to run a business from scratch. No need to mess around with product names, product types, production, and marketing. They just run a system that has been running well and has been tested its success.
Franchise activity is a way to expand and expand the business by working with various parties who have the capital and want to open a business but do not have a good brand and famous. Companies that open a franchise are usually well-known companies and are guaranteed in terms of product quality, service and how to market their products. Technically, the work contract between the franchisor and franchisee is called a franchise, but now the word franchise is more often analogous to the way the franchisee runs its business.
Advantages of Business Franchise
Benefits of doing business franchise when viewed from the side of franchisee and franchise is a mutually beneficial and requires cooperation. Franchise need capital and network expansion, franchisees need well-known products that are easy to sell and market.
- A franchisee (person who buys a franchise) benefits from a franchise system. He does not have to bother to set up, determine, market the product to be sold from scratch. All is easy, just run it and sell products that have been tested and known to the public.
- People who have the capital, want to do business but do not know and worry about the risks, can try the franchise business. No need to start a business from scratch, just run a model that has been established franchise.
- For franchise, business is an opportunity to expand the business and distribution of products more widely without having to drain large capital, without having to open their own outlets in various places, which certainly requires a large capital. So the franchise business is one way to penetrate the market more broadly with the help of franchisees. With more and more franchisees the stronger the business network it has.