Franchising as Your Business Model

Franchising is a business model that has enjoyed a high rate of success in the past decade. Whereas operating your own business may offer just a twenty-percent chance of success, investing in a franchise offers you an eighty-percent chance of being successful because the concept focuses on uniformity in terms of product, quality and service. Most consumers feel comfortable using outlets of well-known franchise chains, taking the view that an established track record of success will offer a guarantee of satisfaction.

Franchising originated in the United States and spread quickly to other parts of the world. It works when an investor buys a franchise and, as franchisee, pays an initial fee and a percentage of revenue from sales, or royalties. This is in exchange for the rights to operate the business in his particular part of the world including the use of the trademark, corporate identity and management and production process presented on a turnkey basis.

A franchiser's obligation is the provide training, transfer product details and business know-how and expertise accumulated from experience in operating that particular business, and provide equipment and technology required by franchisees. Franchisers also provide advice concerning business operations with respect to production management, quality control and marketing. In short, they serve as business trainers for their franchisees throughout the terms of the agreement.

The most important thing in entering the franchising system is to understand the agreement thoroughly to ensure your own interests are catered for before choosing the business in which to engage. Prospective franchisees must also be able to accept that they will operate the business under the terms and regulations of the franchisers' systems.

Today, franchising plays a role in nearly every category of business, from food to medicine, clothing outlets to opticians, video/DVD outlets, ornaments to greeting cards. It covers convenient stores, IT and communications, educational and skill training institutions, beauty schools, printed material, laundry services, consulting, private postal services, car maintenance, hotels, manpower, weddings, bookstores, as well as property selling and leasing agencies.

Some well known franchising operators in Thailand are Pizza-Hut, McDonalds, Caltex and Bangchak petrol stations, Tsutaya Video/DVD rental stores, Avis car rental, and Mister Donut..

Although franchising a business can help to reduce the procedures as well as the risks, it is not a ready-made formula that will guarantee one hundred percent survival of the business. There are other factors that contribute to the success of every franchise, such as the location, working capital, and the dedication and determination of the business operators themselves.