17 Oct Advantages and Disadvantages of Being Part of A Mature Franchise Network
If you’re planning to take the leap into the franchising space, one of the questions that’s bound to arise is…Whether you should be part of a comparatively new franchise network or a more well-established, mature one.
Let’s take a look at the advantages and disadvantages of being part of a mature franchise network.
#1 Good Brand Recognition
When you join a mature franchise network, you know you are going to be part of a well-recognised brand. The public will expect a certain level of consistency and quality from franchisees of a branded business. They perceive there is less risk when shopping for any services or products in well-established chains. Regardless of what level of services and products a brand provides, there will always be customers that are willing to shop at these businesses. This is because the services or products meet their specific needs and they know they can expect consistency from each location regardless of where it is.
#2 Good Existing Customer Base
As mentioned earlier, in the case of an established franchise network, customers know exactly what to expect. This brand recognition comes from all the marketing, advertising and hard work that has been put in by the existing franchisees within that network. This allows you, as a new entrant, to compete on the same level as other existing businesses in the market.
#3 Good Level Of Support
A credible and strong franchise network will be well-structured and have tried & tested operating systems. They will also have tested store designs, development assistance as well as the site selection assistance. You can expect reduced equipment costs; initial & ongoing training for staff as well as management. The network would provide marketing and advertising programs, operations manuals and any other support you need to successfully launch a franchisee business. There will also be other seasoned franchisees to provide you the support you need.
#4 Ongoing benefits
The franchisor would provide field support and maintain the frequency of communications. They would typically do a very good job at ensuring that the franchisees in their network benefit from the excellent purchasing power that their system has. They will also be able to obtain supplies in inventory at a much lower cost than competitors, which can be a distinct benefit.
#5 Brand’s Marketing Power
In any kind of industry and business, professional marketing has a very important role to play. When delivered in the right manner, and with the right message, it can make a positive impact on sales and profitability. A franchisor in a strong and well-established network would be able to develop the latest point-of-sale marketing materials, grand opening programs, advertising, and marketing materials that an independent business would never be able to afford.
While there are a lot of upsides to being part of a mature franchisee network, there are certain disadvantages as well such as:
- You lose your independence because you have to fall in line with the requirements of the franchise. You can’t really add new services or products or eliminate ones that you prefer not to sell.
- The franchisor would typically dictate what your hours of operations would be and will also set to the pricing.
- In a mature network, the franchisor will choose the vendors.
- In some cases when you join a very large network, it is possible that your local marketing is neglected by the franchisor.
Since there are specific pros and cons to being part of a mature franchise system, you need to weigh the pros and cons in order to understand whether the benefits outweigh the disadvantages. If you want to know more about franchising, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435