When we think about expansion and solidification of the brand in the market, one of the strategies that stands out the most is franchising or, as it is better known, the franchising model.
Many ask themselves: “Is adopting a franchise model the right decision for my business?” In this article I will try to answer that question and show why the answer is often a resounding “yes”.
1. Fast reach and controlled expansion
Unlike an organic expansion, where you would need to establish each new unit from scratch, the franchise system allows you to grow quickly, relying on partners – the franchisees – who invest in opening new units.
This not only speeds up the expansion process, but also makes it more controlled, as the franchisor provides established standards and systems that the franchisee must follow.
Besides, it’s a way to help people who are starting a business. After all, it’s a way for them to learn a proven method that can work.
2. Reduction of financial risks
By opting for the franchise model, the entrepreneur transfers part of the financial risk associated with opening new units to the franchisees.
These, in turn, benefit from using an established brand and a tried-and-true business model. That is, it brings security to both sides.
At SEDA College, for example, the franchising process allowed for an assertive entry into the Brazilian market, making the investment safer for everyone involved.
3. Strengthening the brand
A broader market presence implies greater brand recognition. With several units operating under the same standard and quality, the brand’s perception is strengthened, becoming a reference in its area of operation.
This increases consumer confidence and hence sales potential. Therefore, I see that this is a correct growth model.
4. Constant feedback for improvements
Franchisees are, at their core, entrepreneurs. They bring with them valuable experience, insights and feedback about the local market and the business itself.
This constant interaction creates a communication channel that can be vital to improving the business model, adapting to trends and responding promptly to challenges.
5. Economy of scale in purchasing and marketing
Having several units operating under the same name enables mass negotiations, whether in the purchase of inputs or in the implementation of marketing campaigns.
This economy of scale can result in lower costs per unit, increasing the overall profitability of the business. And this is very good for the franchisee.
Concluding
Franchising is not just a passing trend. It’s a robust and proven strategy that allows companies of all sizes to expand and solidify their market presence in a controlled and efficient way.
Through franchising, we have managed not only to expand our presence, but also to strengthen our brand, share risks and benefit from the local expertise of our franchisees. Do you agree?
