Franchising: A sure way to win, retain customers

image in the minds of current and future customers, about how the company’s products and services can help them.
It is all about getting and keeping customers. It all begins with a contractual agreement in which the owner (franchisor) of a trademark, trade name, or copyright licences any other business owner (franchisee) to conduct business by selling goods and/or services under the brand.
The franchisee pays a franchise fee and royalties.
This can be a very rewarding business model that will be riding on an enterprise with a proven track record that is well known.
One of the most recognisable franchises running in Zimbabwe is the Spar brand that has experienced tremendous growth and market share in the retail business countrywide.
Emerging from the decade of financial instability, the Spar brand embarked on a rapid expansion programme.
It took on board hordes of enterprising businesspeople who had their own shops across the country and helped them to restock and rebrand them as Spar stores to spruce up their images to trade in a dollarised environment.
There are also other franchises operating locally and abroad in the food and beverage industry such as the Keg and Maiden, KFC, MacDonald’s, Wimpy and Mug and Bean.
The Zimbabwe National Chamber of Commerce was one of the advocates for the establishment of franchises, but the outcome has been rather disappointing. There have, however, been commendable moves of late to revive the concept.
Here are some of the advantages for going the franchising route: brand name appeal, proven track record, start up support, ongoing support, financing assistance, advertising and purchasing support, training and guidance.
As stated earlier, franchising can be viewed as a strategic alliance between groups of people who have specific relationships and responsibilities with a common goal to dominate markets.
This is all done to outdo their competitors in getting and keeping customers.
From the franchisors’ perspective, it is a way to achieve rapid expansion with dedicated owners and/or operators.
Getting a franchise, however, does not come cheap. One has to contend with high start-up costs that have to match the standards set by the franchisor.
The dealer has to pay franchise fees in addition to rigid operating procedures. There is the control of the franchisor to contend with in addition to some decisions that are classified as “bad” in the eyes of the franchisee.
It has also been observed that the relationships are often marred by numerous unfulfilled promises by the franchisor.
It could be issues centred on providing training for some members of staff or branding issues that take forever. There are some costs associated with running a franchise and inter alia this includes high operating costs for an effective head office.
Because of the desire to pursue a rapid expansion programme, income per unit may be reduced as well. There could also be some restrictions on freedom to act on particular issues. Just like with any other business concept, there are many misconceptions about franchising and one of them is that some of the dealers feel that they have “bought” the franchise.
No way, you are just basically investing your assets in a system to utilise the brand name, operating system and ongoing support.
Effectively, it means that you have been licensed to use the brand name and operating system, you do not own the franchise. The business relationship is a joint commitment by all franchisees (Oh yes, you are not the only one), to get and keep customers.
As a franchisee, you are legally bound to get and keep the customers using the prescribed marketing and operating systems of the franchisor.
It is critical for the dealer to understand the business and legal ramifications of the relationship between the franchisor and other stakeholders in the value chain.
Teamwork is of the utmost importance when operating within a franchise. It is important to note that other franchisees and other company-operated units are not your competition.
They are actually partners with whom you share the task of establishing the brand as the dominant one in all markets entered and reinforcing the customers’ familiarity with and trust in the brand.
There is a shared responsibility for quality, convenience and other factors that define the franchise and ensures repeat business for everyone.
In reaching a decision to become a franchisee, you must be convinced that you can be more successful using someone’s brand and operating according to their systems and methods as opposed to your own independent business and compete against them.
The ultimate decision lies with the dealer on who they want to get into bed with and whether you are committed to the vision of getting and keeping customers.
As always, let’s make money.