How does a franchise network work?

When creating a business, an entrepreneur may face difficulties when he wants to start the phase of prospecting for customers or promoting his items. It can even happen that he has difficulties to find an office. It is therefore obvious that the lack of guidelines to guide new entrepreneurs in the steps to follow can be a hindrance to the growth of their business. To remedy this situation, there is a way to reach the desired stage of development. This is the evolution of a collaborative network that allows for continuous and beneficial interaction between all stakeholders. But how does this network work?

Nature and definition of the collaborative network of companies

Franchising is a collective alternative that allows you to set up your own business, inspired on the one hand by a proven emergence model and on the other hand by benefiting from the strength of an efficient network. This business system is based as much on strict operating rules as on virtuous principles. There are essentially two stakeholders. On the one hand, there is the franchisor, who has emerged through a specific, beneficial and transferable development model. On the other side are the franchisees, the legally independent natural or legal persons who plan to follow the franchisor. This alternative offers a kind of incubation to all those who wish to see their business prosper in a consistent manner, without having to repeat the mistakes made by their peers who have already emerged.

How it works

The business network is based on an approach that emphasizes the start-up of individual initiatives, while referring to pre-established models. First, the franchisor brings his know-how and his notoriety which he makes available to all franchisees so that they can benefit from it. By this act, he offers them a better visibility as well as important resources. This increases their level of competitiveness in the markets where they make their first move. In response to the franchisor’s input, the franchisees undertake to follow carefully any instructions or guidelines they receive. In doing so, they have an obligation to ensure, in some way, the satisfaction of their target customers. The latter will have no difficulty in retaining their loyalty when the service provided meets their expectations. However, this opportunity offered by the network is not without a financial counterpart. In fact, membership in this network of companies is subject to the payment of certain fees that serve as membership dues and royalties on annual revenues. Also, the beneficiaries of this melting pot of interactions between several companies owe each other mutual respect and open collaboration.

Characteristics of the collaborative network

By opting for such a collaboration, you obtain several advantages. You succeed in quickly multiplying your points of sale, while bringing a particular touch to your image with your consumers. You also benefit from an important intellectual follow-up which will allow you to carry out the discussions with your various partners (customers and suppliers mainly). The experiences of all the franchisees will indeed be beneficial to you and may help you avoid pitfalls and consequent losses.

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