Franchising

The road to owning your own business can, like many a new beginning, be arduous and difficult. However, you can make your start in entrepreneurship easier with a proven business concept - so-called franchising. With this, you benefit from an already existing infrastructure as well as a well-known name. Your task will primarily be to distribute the business locally under the franchisor's conditions and to build up a customer base. As the success of any franchise business depends on sales, effective promotional activities are required to increase sales and maintain growth. Learn more about the business concept of franchising now and read all about successful advertising tactics!

What is meant by the term franchising?

Franchising is understood to be a partnership-based distribution system consisting of at least two parties: a franchisor and at least one franchisee. Both parties conclude a contract in which it is stated, among other things, that the franchisor makes its established business concept available to its cooperation partner in return for a licence fee. During this time, the franchisee is allowed to use the brand name and the given infrastructure of the franchise company to sell goods or market services. In doing so, all entrepreneurs of the franchise business must have a uniform appearance from the corporate identity to the product manufacturing or service provision. In many cases, the franchisee is also obliged to hand over part of the profit generated to the originator of the business idea.

The different types of franchising

Franchises have not been uncommon for a long time. Many industries, such as cosmetics, gastronomy or clothing, benefit from this form of business. Franchise systems can be divided into three types of business activities: product franchising, sales franchising and service franchising. While distribution franchising is currently the most common on the market, service franchising has the highest growth rates.

1. Product franchising

In product franchising, the franchisee manufactures goods according to the franchisor's instructions. The self-manufactured products are then sold under the franchisor's product name. Well-known franchises are, for example, Coca-Cola and many other producers of beverages whose franchisees operate bottling plants.

2. Distribution franchising

In this form of franchising, the franchisee sells the franchisor's entire product range or a selection of it under the franchisor's name. Both the shop fittings and the organisation of the business management are carried out according to fixed specifications. Fashion companies such as Tom Tailor or S. Oliver, DIY stores and petrol stations, for example, make use of distribution franchising, in which the partnership usually consists of a wholesaler and several retailers.

3. Service franchising

Another form of franchising is service franchising. In compliance with certain guidelines and requirements of the franchisor, the franchisee offers a certain service to the customers. In this case, the services are sold under the business name, trade name or trademark. Prominent examples of this form of business are fast food providers, restaurants and hotel chains. Likewise, providers from the education, beauty, fitness and health sectors are typical representatives of service franchising.

The advantages and disadvantages of franchising

With the establishment of a franchise company, you will be confronted with both advantages and disadvantages. For example, companies whose brand is already established on the market promise good prospects of high turnover, which minimizes the start-up risk. Likewise, franchisees have the opportunity to draw on the knowledge and industry expertise of their franchisor or to participate in training courses that provide the licensee with the necessary technical and product knowledge. Accordingly, franchisees are very well prepared for their position and the associated tasks. Besides sophisticated marketing strategies, licensees can also use the complete infrastructure of the licensor and thus benefit from various services and purchasing conditions.

Furthermore, there are disadvantages to franchising which should not be underestimated due to their possible effects. For example, franchisees are given little leeway to add their own touch to the company. Additional clauses can further restrict licensees. A good example is regulations that specify the cleaning agents with which the business premises are to be cleaned. These are then purchased exclusively from the franchisor. Furthermore, in the negotiation phase, often embellished profit forecasts are presented, which, however, are not comparable with regard to the location or other conditions. If financial bottlenecks or sales weaknesses then occur, the franchisees may not always receive the necessary support from the franchisor. In addition, the licensor may be in the significantly stronger position, resulting in an unbalanced partnership. In this case, both transparency and legal certainty may not be provided.

Franchising as a strategy of every franchise company

Franchising itself represents a special business strategy for gaining market share and increasing and maintaining the customer base. The close relationship network of cooperation partners enables all participants to benefit jointly from the brand identification, the successful business processes as well as the proven distribution system. Franchisors who want to expand abroad make particular use of this business concept. For example, they look for potential franchisees in the relevant target country who already have valuable cultural and language skills. Establishing a franchise business located abroad is thus easier to achieve than with candidates from the country of origin.

Franchise marketing - tips for a successful appearance

First and foremost, the franchisor is the one responsible for the overall success of the brand. This includes creating a franchise advertising strategy and a comprehensive marketing plan for the entire franchise. So, the main goal of franchise marketing should be to build a strong brand, build a customer base and grow it.

Online marketing for franchise companies

The franchisor has two options for marketing the franchise business. Either the franchisor manages the marketing of all businesses, or franchisees are given a framework to follow in creating a local marketing plan. Regardless of the focus, the goal is always to maintain brand consistency.

Consumers log on to the Internet from anywhere, so franchises should make sure you're maximizing your potential. To create a local marketing plan for online marketing, you need to have an intimate knowledge of your target audience's needs and tailor marketing campaigns to meet them. Regular budgeting for marketing will also help you keep track of your franchise's costs.

Direct mailings can also be used to target the franchise's customers who are most likely to be interested in the products and services. One-time offers and contests can also encourage brand loyalty. Likewise, a well-designed content marketing strategy can contribute greatly to success.

Traditional marketing for franchises

In addition to online marketing, traditional marketing, such as local press, radio, cold calling and on-site visits, should still not be ignored. The important thing here is that you know the target group and thus the potential customers well and know which media they use.

As already known, the competition never sleeps. Therefore, it is all the more important that you always keep an eye on your competitors and stand out from the crowd with the offers of your franchise company. Likewise, you can learn from your competitors and be inspired by good advertising campaigns. There are no limits to your creativity here. Do you still need the right advertising equipment for your campaign? At print24, we offer our customers high-quality processed canvases, beach flags, banners and much more, which you can optimally coordinate with the corporate design of your franchise company. Ensure the right attention at trade fairs or other events with our advertising equipment and feel free to contact us if you have any questions. We will be happy to help you!