Just an Entrepreneur? Nah, Be Smart, Be Franpreneur
Not too long ago, for many, getting a 9 to 5 job was a go-to.
Not too long ago, for many, getting a 9 to 5 job was a go-to. Then came the entrepreneurial rein, where many dared to step out of their comfort zone, march into the uncertain territories and start a new company, with possibly new products and services. While each of them is still very prevalent, they have distinct problems. The first path is boring, and the latter one has certain limitations. The first one is ever-existing; the second one seems to have met its in-progress resolution. Because as is our habit of finding keys to even the most repressive of deadlocks, the young-gen entrepreneurs of today have found the right solutions to their obstacles. Many of them are now taking a dynamic turn in their journey from their aspirations of being a tycoon to donning, unoriginally yet effectively, the hat of a Franpreneur.
Franchise + Entrepreneurs
If the term didn’t give away its definition already, Franpreneurs are entrepreneurs working in the franchise model. They don’t create standalone structures to expand their wings to new markets; instead, they partner with other like-minded entrepreneurs to bank on their respective resources to meet business goals of higher growth and sustainability. A franchisor – or a franpreneur – licenses a franchisee to use its brand name, leverage its goodwill and sell its profit.
This helps the franchisor to expand the business, with least of investment, to new markets. Franchisee, on the other hand, gets to have a business under a name that’s already well-established. Making sales, for them, become easier and quicker. The agreement between the two parties settles profit and other perks on appropriate terms that are fitting to both of them.
Not that this business framework didn’t exist a few decades back. From McDonald’s, KFC and Dunkin’ Donuts to Century 21, Matco Tools and Marriott International – these are some of the globally renowned names who took to this model and flew to seamless success. Here are the fastest growing franchises in the USA along with their estimated startup costs…
However, in view of the challenges that entrepreneurs often face, franchising has become quite attractive in recent times. Not exactly though but it seems to be a sure-shot way of growing a business even when limited in budget and resources.
Even the small companies now, armed with bigger ideas, are striding this way much more confidently. And the rise of some very good solution providers, who facilitate starting, building and buying a franchise, has smoothened the way further, including for those who have less idea about this model. No wonder, franchising in India has witness an incredible growth of around 30-35 percent YoY in the last 5 years.
Perks of Being a Franpreneur
Unsurprisingly, being a franpreneur has perks in plenty. Of course, finding franchisees help your business grow at a much faster pace. But exceptional is how easier, efficient and cost-effective this entire process becomes. The partnering business, although under your goodwill and shade, work totally independently with their own unique ideas and strategies. They, unless stated in the agreement, work with full autonomy.
This arrangement provides franpreneurs an ease of supervision. They are left free from the day-to-day management of their franchise units. The franchisee takes the full onus of its growth, operations, and staffing. With the lower load on your back, you enjoy the higher convenience and more time at-hand to boost your business even higher. The better these partners do, the faster your organization grows. Imagine assigning many franchisees who bring their own capital—your dream of turning your brand into the next big thing can actually take a real shape much quicker.
In short, transcending yourself from being just another entrepreneur to a franpreneur, you get:
- Lower capital requirement
- Boosted business growth
- Higher valuation of your brand
- Easier (or no) supervision of franchise units
When all combined, these perks unlock your door for higher profitability. And as a business owner, what more do you want?
Adding brownie points to the overall calculation is how the current trends is shaping up to be. In 3rd position right now, India is fast emerging to be largest retail market in the world. This, alone, provides sufficient opportunities to business owners to leverage the market growth. The fast urbanization of the country – with 60 percent of the country expected to be urbanized in the next 30 years – further adds to the excitement towards franchising. So, yes, you do make big profits—and you make the profits rather quickly.
Not Everything is Fairytale-esque
Everything about the franchising model seems perfect. But sadly, we don’t live in an ideal world. Being a franpreneur has its challenges. And if handled lackingly, it could actually turn disastrous for the business.
Why would people want to be your franchisee? This is the single most important question that you must ask yourself. Because just like you who want the best partners, your partners, too, would want the best franchisor. Why would someone want to associate themselves with your business when you’re yourself struggling to build your brand’s goodwill! So, the first step in this direction is to build your brand or product an identity that’s credible enough. And this is a challenge in itself that requires sufficient investment of not just money and resource but also hard work and creativity.
Next big obstacle to being a (successful) franpreneur is finding the right franchisees. This process is hectic and requires quite a bit of time. You don’t want to end up with the wrong partner who not only NOT adds to your returns but actually tarnishes your brand’s image. One franchise unit of McDonald’s, for example, can have issues with cleanliness standards. Now the brand takes enough measures to provide customers the cleanest infrastructure to eat. But irresponsibleness and lack in efforts of one franchised unit puts a dent on its whole image. These scenarios are quite common, and often imminent as you grow. When recruiting your franchisees, you’re tasked to be very careful in handpicking only those who look committed and qualified enough. Needless to say, this step is easier said than done—very time consuming and requires effectual human resource and recruitment skills.
Also, another one of mistakes that many businesses make when building a franchise is having a faulty agreement. Your relationship with the franchisees is bound and regulated through this agreement. Even a slightest of loopholes here can pave the way to bigger risks for your brand. A fraudulent partner could easily manipulate the ambiguity in these terms, harming your entire business. Crafting a unique, definite but equally flexible franchise agreement is very important. This isn’t easy in any way though. It requires proper bargain between the parties that can often be hassling even for the qualified lawyers.
The safest bet for anyone looking to don the hat of a franpreneur is to dial a good solution provider who expertise in this niche. Even then though, things aren’t assured to be smooth. Not at least in the first few years when your entire franchise structure is in the growth phase. Besides, the model seems quite popular in many industries, giving rise to many success stories for all kinds of business.
So regardless your industry, you can expect opportunities in abundance. And once the wheels are on run, you can expect big things in the coming days. Because like they say, every great journey has a struggling beginning. And this includes franpreneur’s too.