Your Retail Coach
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How Franchising May Help Businesses Overcome the COVID Slowdown
INDEX Your Retail Coach
1. INTRODUCTION 2. TYPES OF FRANCHISING 3. SHARED CAPITAL BURDEN 4. USING THE BRAND POWER 5. AVAILING EXPERTISE AND EXPERIENCE OF THE FRANCHISOR 6. RE-ENGAGE MANPOWER 7. RISK OPTIMIZATION 8. A GOOD TIME FOR DIGITAL COMMERCE 9. SUMMARY
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1. INTRODUCTION Your Retail Coach
Franchising helps small businesses reach out to new and bigger markets and improve their visibility and profitability In franchising, there’s a franchisor that grants license or rights to a franchisee to carry out business on behalf of the former based on an agreed framework and bound by a contract
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Bigger firms use this model to reduce their operational costs, focus on their core competencies, and penetrate existing and new markets
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2. TYPES OF FRANCHISING Your Retail Coach
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COFO (Company Owned Franchise Operated)
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FOFO (Franchise Owned Franchise Operated)
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FOCO (Franchise Owned Company Operated)
FICO (Franchise Invested Company Operated)
ď ą The franchisee is required to maintain the overall business and operational standards laid down by the franchisor company for its franchisee stores 4
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3. SHARED CAPITAL BURDEN Your Retail Coach
An economy runs on consumption and people are not able to spend because of the lockdown For any business to grow or expand, lack of capital serves as the most common barrier which now stands accentuated due to the pandemic crisis A lot of businesses are suffering due to lost demand and sales and cash inflow has hit zero for almost all businesses Franchising emerges as a ray of hope for businesses and entrepreneurs to work on business growth and development under the COFO model
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INDEX
4. USING THE BRAND POWER Your Retail Coach
In the post lockdown era, big brands might remain advantageous over brands with lesser visibility or customer awareness or the necessary resourcefulness Given the capabilities of the big companies in terms of their supply chain, logistics and infrastructure, financial prowess, and their brand value, these companies can serve as an umbrella organization for smaller, local businesses Small businesses can associate with big brands via suitable franchising arrangements and keep their business running The associated brand and reputation of the franchisor company will also help the smaller businesses in catering to their local markets
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5. AVAILING EXPERTISE AND EXPERIENCE OF THE FRANCHISOR Your Retail Coach
With the expertise of the franchisor in handling similar businesses and its experience of operating in the same industry, franchisees will have an upper hand in quickly setting up the business framework Franchisees will also save time and effort otherwise involved in building a new supply chain network Franchise business development plans also give the desirable entrepreneurs a platform of opportunity to start their business
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6. RE-ENGAGE MANPOWER Your Retail Coach
In the post lockdown era, unemployment will be a big economic concern With lesser business activity, there will be lesser manpower requirements The franchising route may provide an opportunity for businesses in getting back their lost momentum The increased business activity shall reinstate the need for human resources
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7. RISK OPTIMIZATION Your Retail Coach
With reduced demand for consumption, the risks of running an existing business or expanding during or after the COVID crisis has increased drastically When existing businesses are fighting to survive, franchising models can give them a helping hand in recovering and getting back on their feet A well-defined retail franchise business plan will help ensure that the existing supply chain network of the franchisor is accessible to the franchisee businesses The risk of losing out on sales and market share reduces with a franchise model business plan 9
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8. A GOOD TIME FOR DIGITAL COMMERCE Your Retail Coach
Small businesses for whom going digital and being tech-driven was not conceived as a necessity is slowly turning out to be a strong possibility in the near future Technology is not just an enabler but is a necessity for improved effectiveness and efficiency for business With franchising and a well-defined franchise business development plan, the franchisor’s existing digital and technological network and infrastructure can be used by the franchisee businesses
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9. SUMMARY Your Retail Coach
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From sharing capital burden to risk optimization, franchising opportunities may emerge as a winning formula in the post lockdown period
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But that will also call for robust planning and a welldefined roadmap in consideration of all the relevant factors for franchise business development
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For further details and fulfilling your consultancy and SOPs needs, please visit us at https://www.yourretailcoach.in/how-franchising-may-help-businesses-overcome-the-cov id-slowdown/ https://www.yourretailcoach.in/ https://www.businessprocessxperts.com/
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