In the modern world, starting on a business venture has become an excellent option for people that want to get out of the 9-5 grind, have a passion for working in a certain field and be their own boss.
The commonest form of opportunism in the franchise industry is free-riding. In this, a franchisee joins a very well-recognised network but adds almost nothing of their own personal endeavours and entrepreneurship to the business; in short, it's only the franchisor's efforts and the strong brand that generate customers for that franchisee's business.
For a large majority of people, becoming their own boss is the driving factor in them deciding to purchase a franchise. But the real satisfaction also comes from good financial performance and profitability.
If you ask a potential franchisee why they feel they want to enter into this space, you will get varying answers; different people have different priorities and wants and that's what drives them to look for better careers and business opportunities in life. Let's take a look at some of the most prominent reasons why franchisees buy franchises:
If you are planning on venturing into the franchising space and have started conducting some research on the industry, how it works and the different franchising options it offers, you must have realised that you have the option to choose between a big brand franchise that has a global or national presence or one that is more niche in nature, has a presence in only a certain region or area and caters to a very specific demographic.
Just as in the case of other industry, there exist certain rules and codes that govern the Franchising industry as well. The Franchising Code of Conduct in Australia was introduced on July 1, 1998 and resolving franchise disputes has been one of the core components of this code.
An underperforming franchisee in a network, not only does harm to their business, but to the brand they represent as well. However, the lead causes and signs of underperformance aren't completely understood.
One of the primary reasons businesses decide to embark on the franchising path, is the lack of capital required for growth. When experts are discussing why franchising occurs, they refer to this as the theory of capital constraints.