Have you ever heard of open lines as a franchisee? The term franchisee is a word that is common in business but is rarely used by ordinary people. For those of you who want to learn more about this problem, let’s discuss it together in the following article!
What is a franchise?
Franchisee is a term for institutions or individuals who pay franchises for permission to use their IPR. For example, you are an Indonesian who wants to open a pizza restaurant in Indonesia. Instead of making your own, you can become a Franchisee for Pizza Hut, whose brand is already well-known, which many people clearly love.
As a franchisee, you can use the power of the franchise brand to build your own business. Of course later you will return some of the profits as a fee to the franchisee. But the rest you can enjoy yourself as company income.
Pros of Being a Franchisee
Many people choose to become franchisees rather than create their own brands. Why is that? If you want to know the advantages of choosing this line of business, let’s discuss the following 3 most prominent advantages:
No Big Marketing Costs
The first advantage of being a franchisee is the low cost of marketing. Because you already hold a franchise brand that is well known to many people, you don’t need to go out of great effort to introduce your business name.
Compare this with when you make your own business and have to do a promotion. People don’t know about your business, so the community outreach process starts at 0. Getting people to believe your business is attractive is not easy. But with big brand names, things are simpler.
More Definite Income
When people already know the franchise, they will be more sure to buy there. For example, many foreign travelers come to Indonesia and choose to eat KFC or McDonald’s. This happens because they already know the brand and are sure of the dishes there. No matter the menu and the choice of food is different, the important thing is that they feel that they are close.
Customers like this could be a more definite income. If you start a business from scratch and nobody knows you, your income will definitely not be stable. You have to put in effort for promotion and marketing before you can make steady income.
Lower Business Capital
The capital to start a business as a franchisee is much lower than opening your own business. In addition, you can get support from the franchisor for many things. Starting from employee training, SOP, recipes and even supplies.
Things You Should Look For When You Are A Franchisee
If you decide you want to take the franchisee path for business, there are many things that need to be considered. Franchisees are a business line that seems easy, but if not managed properly, you will definitely lose out. So to be more successful, let’s pay attention to the following important things:
Your Budget Should Be More
When you want to take a franchise, you make sure the capital you have is above the offer. For example, you can become a franchisee by paying only 10 million Rupiah. But you better have 15 to 20 million Rupiah as capital.
For good business, you certainly need various things to support you. Starting from operating costs to asset needs that are not assisted by franchising. Using a more budget, you can also take care of sudden needs when there are sudden expenses.
Pay attention to the terms of the contract
When you become a franchisee, you must read the contract given. Things like SOP rules as well as restrictions that are given can be binding. When you violate, you could be sued and compensated in large amounts.
Some people get into this problem because they don’t understand the contract and its limitations. So don’t let this happen to you. Make sure to read the full terms and contracts so that the business can run more smoothly.
Always Weigh Franchise Fee
When you want to become a franchisee, make sure you weigh the fee. The amount of this fee can seem light at first, but subsequent bills can be different. Some franchisees make contractual arrangements light in terms of initial payment. But the fee per month is made higher.
In addition, the franchisee can provide payment terms for contract termination. So if you want to stop being their franchisee, you still have to pay again. Things like this will be detrimental. So weigh the costs first before making a decision.
So much discussion about this franchisee. As long as you know that the franchisee line is a good choice, there is nothing wrong with trying to take this venture. Hope you have found this discussion useful!