Stores or outlets whose branches are everywhere may surprise and wonder, how come there are people who handle so many shops or outlets throughout the region? It turns out that a business with a famous name is a franchise of a business that is already well known. This business system has been widely applied, especially by those who may not want to bother introducing a new brand into a market.

It looks like it might be easy, because all you have to do is spend capital and manage the flow for supply only. However, there are things that you must recognize and consider before starting this one business so that you don't just waste money. Check out the following explanation!

Maybe you are still confused about how this one business system works and what you will get

Franchising or franchising is a system of starting a new business but using a pre-existing trademark. For example, well-known brands such as McDonalds, Dunkin Donuts, Tea Poci Drinks, Nyoklat, etc. Later, the person who will establish the franchise (franchisee) will be asked to pay the principal money to the brand owner (franchisor) at the beginning of the time before the store or outlet is opened and operating.

After that, franchisees who have paid can only use intellectual property in the form of trademarks and characteristics owned by the franchisor, even you also directly get suppliers from them.

Even though it looks easy, apart from getting the benefits you also have to consider the drawbacks

In addition to getting the rights to the trademarks and characteristics owned, you can also get some of these advantages:

• You no longer need to think about business ideas and concepts because everything is ready, so you just have to run the existing management.

• Businesses tend to profit faster because of a well-known brand.

• The owner will usually provide training on technical, operational and financial management, and other knowledge.

• You can get convenience in getting suppliers with lower price offers so that the selling price of your products can be more competitive.

Apart from getting the benefits, the following disadvantages should also be considered:

• Even though you have paid a certain amount of money, your business is still controlled by the franchisor so it is difficult to innovate.

• There is only a single supplier who has collaborated with the franchisor so it is difficult to sell products from other parties who have not cooperated.

• If something bad happens to this business then your business reputation will also be affected.

• There may be profit sharing to be paid.

Before deciding to start this business you should consider it and prepare carefully

There are several things that you must prepare before starting a franchise business so that you can maximize profits.

• Choose the right business and adapt easily, especially during a pandemic like today. You can choose delivery services such as JNE or J&T, laundry businesses such as The Clean Bar Laundry, or literal drinks that are starting to become increasingly popular.

• Although you don't need to build a brand, you still need to learn the ins and outs of the business and brand that you are going to buy a franchise for, how the operational system is and the development of the business so far.

• Usually there will be a training and standardization process carried out by the franchisor, you should follow this stage so you can know the procedures applied.

• Don't forget to explain how the profit-sharing system is and things like that so that there are no problems in the middle of the road.

A franchise business or franchise may be profitable for those of you who are still beginners in managing a business so you can simultaneously learn how a business cycle can work well. However, if you want to continue to grow with your own ideas and innovations then you should be prepared to build a brand from 0.