Franchising and Small Business

Question: Discuss about theFranchising and Small Business. Answer: Franchisee in a dog washing franchise or operating an independent dog washing business Introduction The people opt for franchising as a new business opportunity as it is easy and simple. Franchising provides a new owner of business for all the help they require to run their own small business. Another advantage of franchising is that the owner will be the part of the system, however, he will not have to share his profit with anyone else and there will be no boss who will keep an eye all time over the activities of yours. Its a better way to start the business as the franchisers will get both support as well as freedom. It is the activities of utilising someone elses settled business and reproduces it so that the customers can rely and trust the well-known brand. However, the success of the franchisor is depended on the success of franchisees (Perrigot, Hussain Windsperger, 2015). Analysis of Dog Washing Franchisee Business Versus Independent Dog Washing Business Safety The franchisee has a back up of big organization both in terms of brand name and financial requirement Marketing The established franchisor have already established that there is a demand in the market place for their services or product and their brand. Moreover, the franchisees already have detailed and comprehensive plan for marketing of their product. Training staff For any new roles and responsibilities, training part consumes significant time. The owner of franchise may provide training to the staff of the franchisor, for instance, online support, handbooks and learning sessions Value Although there is a fees that is to be paid to the owner, the franchisor can easily analyse the benefit and high value for money, when the help and supports from the franchise is taken into consideration. Buying power for lot size the franchisee will be able to gain more service or product at lower cost as compared to the independent business. Communication with companies will also be set up for maximum level at the corporate level. Strength from size the bigger franchisees will be more flexible as compared to the independent small business when it deals with the competitors from the rival organizations, particularly the larger ones (Pacalo, 2014). However, there are some inherent disadvantages with the the franchisee business that will work as advantageous for the independent business. Less level of freedom the operation of the franchisor will be dictated by the owner only. Therefore, the franchisor will have less scope of implementing their own customization, ideas and innovations that can be availed with the independent business. Moreover, the services and products that are offered by the franchisor are subjected to the restrictions of the owner. Contractual limitation this is a crucial issue as the franchisor has to take proper care while signing the agreements. The legal matters must be handled with due care, so that the franchisor is well aware about the terms and condition. Interest clash the franchisee just get a small part of the profit and the franchisee solely depend upon the profit percentage. Moreover, the owner may push the franchisee to take up the tasks that earn more revenue but at the same time not profitable. These problems are not faced by the independent owner (Lee et al., 2015). Involve more risks though some of the franchisee business is regarded as significantly profitable, many more are there those crave for earning revenue. Various risk factors like marketing, staffing, demography and location are associated with the franchisee business. Swings both ways the brand name of the franchisee business can help the franchise, however, if problem arises at international or domestic level, then that will have impact on the local business of the franchise (Michael, 2014). Conclusion: It can be concluded from the above discussion that though there are some advantages with franchise business and some are there with the independent business. However, it solely depends upon the mental approach, financial condition and preference of the person who is intending to start-up the business. The decision also depends on the demand level for the products or service in the local market, level of competition and the cost involved with the start-up of the business. If the business owner does not have much knowledge about the dog washing business and his financial status is not so strong, initially he can go for franchisee business for dog washing. However, if Mr. Xavier is well aware about the market of dog washing business and have knowledge regarding the cost and benefits associated with the independent dog washing business, he must go for the independent business rather than opting for the do washing franchisee. Reference Lee, Y. K., Kim, S. H., Seo, M. K., Hight, S. K. (2015). Market orientation and business performance: Evidence from franchising industry.International Journal of Hospitality Management,44, 28-37. Michael, S. C. (2014). Can franchising be an economic development strategy? An empirical investigation.Small business economics,42(3), 611-620. Pacalo, C. A. (2014). Learning Style AND Entrepreneurial Operations: A Small Business Study. Perrigot, R., Hussain, D., Windsperger, J. (2015). An investigation into independent small business owners perception of franchisee relationships.International Journal of Retail Distribution Management,43(8), 693-711.