In today’s highly competitive economy, businesses are constantly bombarded by a variety of challenges. Smaller businesses find themselves unable to compete as larger ones, sometimes international conglomerates, muscle in on their market share and are often forced to shut down operations and/or close their doors. The number of small businesses is decreasing and franchises are rapidly taking their place. As small, independent businesses give way to franchised businesses, the ‘mom and pop’ stores of old are falling out of fashion. That being said, there are a number of factors to keep in mind when converting your small business into a franchise.
Infinity Brands is a franchising company, with over a decade’s worth of experience. We offer a uniquely-tailored approach to each business considering expanding into a franchise, and we evaluate each one based on its own merit. While we specialise in start-up franchises, we welcome all franchising ideas presented to us by our clients. We provide a step-by-step approach serving as a guide for prospective franchisees to facilitate the franchising process. Before you embark on the franchising adventure, however, we would like to offer the following points for consideration.
Factors to take into account when considering franchising:
Entering into a franchise agreement offers small businesses the support of a big business network, with access to ongoing training and support mechanisms. Access to already existing supply chains and networks saves a lot of time, money and hassle, as the combined buying power of a whole franchise can be leveraged to lower costs through bulk purchase agreements.
Often, there is little to no previous experience required to operate as part of a franchise. The system and business model have been designed to be run by people with little to no experience in the field. While previous experience is a definite benefit, training and onboarding are provided along with a strong framework for managing day-to-day affairs.
However, some people might find the formality of a franchise agreement stifling in terms of the permissible creative freedom imposed upon signing. Various processes and procedures in place can add waiting time to decision making, and some will feel uncomfortable with so many rules and procedures to follow.
Often, further restrictions pertain to operational locations, products sold, and suppliers used for products/parts sourcing are in place. While this could be to the benefit of buying power or discounts, it can be problematic for those with preferred suppliers or existing premises that aren’t in greenlit locations.
Business into a franchise is built to succeed
While success is never a foregone conclusion, franchises do have a higher chance of succeeding than independent businesses. The caveat is that the franchise needs to exercise solid business practices such as good management, hard work, informed decision-making, consistency, excellent customer service, and time management skills. If all of these are implemented, the franchise has the best possible chance of success.
Paulo do Nascimento, a franchise consultant at Infinity Brands, explains the benefit of converting a business into a franchise. “When you are part of a franchise, your chances of success are greater than in independent start-ups. Being part of an established concept will lower the failure rate in a competitive environment – you receive the benefits of the franchisor marketing campaigns as well as Big Brother-like assistance in terms of ongoing training and support.”
According to the Franchising Association of Southern Africa, franchises have a failure rate of 10%. By comparison, small businesses have a failure rate of around 90%!
While there is no foolproof recipe for success, the dynamic and energetic Infinity Brands team is always ready and willing to guide you along the way by offering advice, financial services, training, HR services, marketing and graphics, and IT support. Consider reading one of our success stories, or browsing through the prospectus and company profiles of our existing successful franchises.