WHY FRANCHISING?
Franchise business model offers major benefits for both – franchisors and franchisees.
ADVANTAGES
OF BUYING A FRANCHISE
- Proven business model
- Brand recognition
- Less risk in starting the business
- Business is systematised (standards, guidelines, procedures, etc.)
- Better purchasing prices from product sellers/service suppliers
- Lower probability of bankruptcy
- Initial support to start the business successfully (including marketing support)
- Regular support to manage the business successfully (including marketing support)
- Initial training to start the business successfully
- Regular training to manage the business successfully
- Use the experience (to avoid typical mistakes)
- Exchange of experience within the franchise network
ADVANTAGES
OF FRANCHISING YOUR BUSINESS
- Speed of Growth – By leveraging off of the time and efforts of its franchisees, LAIMA can grow much faster without adding staff. Franchises can open quickly, getting a concept out ahead of the competition.
- International Expansion – International expansion becomes easier, faster, and carries far less risk since a local partner becomes involved. Franchising provides much rapid expansion and helps to enter unknown markets
- Brand Building – Brand awareness. is growing with the opening of new units. The more units, the bigger brand awareness.
- Capital – Since franchisees use their own capital, LAIMA has virtually no investment at the unit level.
- Return on Investment – Because of this lower investment, ROI will be significantly higher.
- Steady stream of income – Enhances cash flow for advertising, R&D, etc.
- Highly Motivated Management – Franchising can provide a company with highly motivated management who will treat individual units as its own, because they have stake in the profits.
- Lean Structure – LAIMA can grow the organization without adding significantly to overhead.
- Long-Term Relationships – LAIMA can invest in the long-term training of its franchisees, as they are unlikely to leave short-term.
- Reduced Role in Day-to-Day Operations – As a franchisor, LAIMA`s primary concern involves the franchisee’s top line performance, reducing the scope of your involvement in day-to-day management.
- Better purchasing conditions – By shopping collectively it is possible to get better purchasing conditions from suppliers
- Unit Performance – Units are generally better run, as is reflected in the fact that franchised stores generally outperform company-owned stores in terms of sales volume.
- Risk Reduction – With no capital invested in units, risk is reduced substantially. Franchisees are responsible for all hiring, leases, and unit-opening expenses, reducing the risk.
- Quality Control – LAIMA franchisees will generally keep their units in better operational shape than unit managers and, as a part of the community, are better able to promote these units locally.
- Advertising – Up on LAIMA`s request, franchisees will contribute to a common advertising and promotional fund. This fund will be used to promote the brand under the direction of LAIMA.