Arunabh Sinha, Founder, UClean tells to the top 10 reasons to Buy A Franchise. Read.
While there are numerous reasons why investing in a franchise is a wise option, Arunabh Sinha gives his top 10.
- To err is human, to franchise is divine: Starting a business on your own is akin to entering uncharted waters which is fraught with danger and risks. There is a huge scope for committing mistakes and errors, some of which could even prove to be fatal to the business. Franchising is the concept where you invest in a brand which is already tried and tested. The brand owners have already committed their own share of errors, learnt from them and perfected the formula. As a franchise, you are only required to implement this formula which significantly reduces the possibility of committing errors and incurring the associated losses.
- BYOB (Be Your Own Boss): Franchising provides you with the opportunity of owning your own business and working towards making it profitable and sustainable. You do not have a reporting manager or a boss. Instead, you have a mentor and guide in the form of your Franchisor who is equally committed to making your business successful.
- United we stand and the power of ‘Collective’: Franchising is a beautiful business where you have multiple entrepreneurs working across different geographies/locations with one unifying objective – to be profitable. You are only as good as your weakest link holds very true for a franchise business. Hence, whenever there is a franchise who is struggling, it is only in the best interest of the Franchisor as well as all franchises to join forces to pull him up and make him successful. One poorly performing franchise would reflect adversely on the brand image of the Franchisor and thereby adversely affect all franchises in the system
- Replicating a successful formula is easy said, easier done: This is one business where ‘One shoe almost fits all’. The best global franchise systems (McDonald's, Subway, Re/Max etc.) pride themselves on having a formula which is region, sector, and timing agnostic. Hence, as an investor, if you believe in the franchise system you are investing in and fully abide by the systems and processes, you are almost guaranteed success.
- Economies of Scale: In a franchise system, you have multiple franchises spread across regions that are sourcing from the same supply chain. This offers great price advantages once the economies of scale kick in
- Optimal sharing of resources: Franchising allows franchises to help each other in terms of crisis by sharing infrastructure and resources. At UClean, we have a significant number of stores across cities like Delhi NCR, Pune, Bengaluru, and Kolkata. If any given store is facing downtime due to machinery breakdown, the store immediately transfers the load to the nearest store which has some spare capacity and ensures the clothes are processed on time. This enables the store to main consistently high Customer Delight Index.
- Financing on the offer: Since franchising is technically extending an already successful formula, it makes it much easier for financial institutions to extend loans. There is already an existing proof of concept and established credibility because of the strong brand name and the financial institutions feel that the risks involved are far lesser than a new brand
- Sharing is growing: While franchising is all about following well-established systems and processes, businesses always throw up unique situations for individual franchises. How they cope with these situations and navigate around them serves as a learning for all other franchises.
- Your customer, our customer: Customer loyalty is all pervasive and is not restricted to a given store. At UClean, we have come across several customers who were availing our services in one city and continue availing our services through another store when they move to another city. A delighted customer thus becomes a loyal customer and the loyalty is attached to the brand and not just a single store
- Marketing activities benefit all: Any large level marketing that happens at a city or country level benefits all franchises in the system. When McDonalds or Dominos give out an advertisement on national television, it automatically leads to increased footfall and increases sales across all stores in India.
