Franchising

Expand Your Horizons - Take Control
By Astreem

The previously niche model of franchising is employed by more businesses than ever today. In fact, almost any product or service can be distributed through franchising. Anyone who owns a successful business model must definitely consider franchising as an efficient method of expansion.

Franchising has proven to be a successful business model that is suitable for established business owners who want to expand their operations in a shorter span of time than if they had expanded on their own. It is a method of doing business by which a Franchisee is granted the right to engage in the business offering and the selling of products or services under a marketing plan or system prescribed by a Franchisor and is substantially associated with the Franchisor’s trademark, name, logo and advertising, in exchange for a fee.

The following are some tips and guidelines from two perspectives: A Franchisor looking to expand overseas, or an Entrepreneur thinking of investing in the RIGHT Franchise Business.

Going International

Key Considerations when entering a Market

  1. Macroeconomic Country Analysis
    PESTLE: Political, Economical, Sociological, Technological, Legal and Environmental

  2. Market and Consumer Analysis
    Industry Specific Market Research, e.g. local tastes and preferences, eating trends and habits, % of people dining out, % of people who eat beef/pork, spending power of working population.

  3. Competitor Analysis
    Dominance in the market, location, size of outlet, types of products and services available at competitor’s outlet, pricing, human traffic of outlet, franchise offerings and support, cost of operations.

  4. Costs of setting up a company and operations

  5. Types of Corporate Entity applicable to a foreign company entering the Market
    E.g. Joint Venture, 100% company owned, Representative office, Franchise Structures such as Master Franchise, Area Franchise and Sub-Franchise.


Astreem’s 8 Ps

After doing the necessary country market research, the next thing you need to do is consider your market entry strategy. Summarised below are Astreem’s 8 Ps as a guideline:



Investing In The Right Franchise

Franchising offers those with an entrepreneurship spirit the opportunity to take up a proven method of investment. Rather than going through the exhausting process of starting afresh, franchising provides investors with a proven brand name and business model to work with right from the start. Bearing in mind that risk is ever present in all investment opportunities, franchising helps mitigate most of the risks. In fact, the only risk franchisees should be concerned about is consumer related volatility.

For existing business owners who decide to set up a franchise, it may also open a new stream of revenue opportunity to them. Depending on the current business model, franchising can even complement their existing business. One example could be business owners who are currently clothing manufacturers. Such owners will be able to establish themselves as distributors (create their own brand name) and eventually franchise their own brands in the retail sector, locally and internationally.

Why Invest in a Franchise?

  1. Become your own Boss
  2. Take charge of how your wealth grows with a turnkey program
  3. Own a well-recognised brand that has a proven track record with multi operations
  4. Know-How of the brand’s proven Systems and Processes
  5. Products/Services are at hand; Reliable source of Supply
  6. Operate a business with pre-opening, opening, post-opening and continuous support from your Franchisor
  7. Franchisor and other franchisees will contribute to marketing of brand

Questions to Ask Yourself When Selecting a Brand to Franchise

  1. Is your selected brand in an industry you can relate to?
  2. Do you like the business?
  3. Can you see yourself running the business?
  4. What role do you want to play in the business? How much time do you intend to invest in the business?
  5. How much capital are you willing to invest?
  6. What is the Return of Investment (ROI) of the brand?
  7. What kind of support will the Franchisor give you?

Do Your Homework

As a potential investor, there is more to simply finding a suitable brand to franchise. Aside from looking for a profitable and sustainable business, it is important that you possess a keen interest in the industry of the particular franchise business. Whilst prior experience in that particular industry is beneficial, it is often not necessary as training and guidance will be provided by the franchisor. As a potential business investor, you should also evaluate your own financial ability and conduct your own market research and market analysis of the brand.

Summary

Franchising is a very viable option, especially for first-time business owners. As with all other businesses, it takes time, dedication and effort to manage a successful franchise; the risks of running a franchise are however mitigated with the support and expertise received from the franchisor.

As a novice investor looking to buy a franchise for the first time, it is highly recommended to consider engaging a Franchise Consultant to make an informed decision and choose the correct brand. Franchise Consultants have the experience and the professional knowledge of franchise operations and would be in a favourable position to advise on which franchise would be best suited for you.




Astreem Consulting – Who We Are

Astreem Consulting is a boutique business consulting company that specialises in helping business owners grow their business through Franchise Development, Business Matching, and Branding & Marketing locally and overseas. It is a business solutions platform committed to working with entrepreneurs to build their businesses and enhance their presence in the market



Astreem houses an unrivalled team of experienced strategists and specialists. As the preferred business solutions partner, Astreem offers dynamic programs and market development strategies, covering strategic and tactical marketing, global positioning, public relations, legal advice and business brokering to small and medium enterprises alike.

Astreem offers complete programs which help in developing various business models; what Astreem can do for you is only limited by what you need. For more information visit us at www.astreem.com, email your enquiries to enquiries@astreem.com or call us at 6749 9233.