Starting a franchise business – side by side to success

The franchise economy is growing and there is no end in sight to the trend. In some countries alone there are around 1000 franchise systems from different industries: the range from which you can choose extends from beauty studios to hardware stores to educational providers.

Maybe starting a franchise brand development is exactly your thing. Behind the term franchise or franchising is a distribution system that relies on the division of labor: while the head office, i.e. the franchisor, is responsible for the further development of the business concept, the franchisees implement it in direct contact with the customers.

All those involved appear as independent entrepreneurs who operate on their own account and in their own name.  Outwardly, however, they all belong to one brand. They are bound to one another via the franchise agreement, which precisely defines their respective duties and rights.

It is noticeable that the majority of franchisees were not self-employed before. Obviously, this special form of business start-up is a good solution for many people to build up a business without their own business idea and to start their own business.

How it works: Who takes on which tasks in franchise systems?

The head office develops the business concept and standardizes the work steps, which are then implemented in the individual franchise companies. She prepares advertising campaigns, conducts training courses and checks on site whether the standards are really being adhered to.

The franchisees “borrow” the business concept from her and pay a fee for it.  You benefit from the awareness of the brand and the know-how of the headquarters, but are limited in your entrepreneurial freedom. Your task is the one-to-one implementation of the concept at your location. This is to ensure a uniform appearance and uniform quality.

This is very important, because  the success of franchise systems is based in large part on the fact that customers always know what to expect  – regardless of which company in the system they visit.

To set up a franchise company and run it successfully, you need a good understanding of numbers, organizational skills and a strong customer focus . Even if the business model is established, success will not inevitably fall into your lap.  You have to make sure that the sales are right, that the customers are satisfied and that you and your team always adhere to the uniform standards. Any qualification you have achieved in any of these subject areas will help you.