Question

If you were opening a retail business, would you prefer to open an independent store or own a store under a franchise arrangement? Explain your preference.

Answer 1

I shall prefer to go for a Franchise arrangement. It is relatively easier to open a Franchise in various countries or at various places within the nation as compared to various other approaches due to lesser investment involvement but deeper penetration into various new markets thereby giving it a presence and recognition along with business in such areas. Major benefits of Franchise arrangement would be that the although the overall control would be rested upon the hands of the parent company, the retail locations would still get to share the operational responsibility as well as afford the financing scheme in agreement with the parent company on various grounds, thus giving such Franchisee a scope to develop their business. Moreover, while the advantage for the Franchisor would be that that it shall be able to tap the best of the human resource located in the local markets where the company intends to set up its presence. Also, to the Franchisee in the global market, it gives a higher level of direct end-customer engagement than you the parent company itself thereby enabling even the Franchisor to customize its products the best possible way for such markets.

In terms of Franchise arrangement, the Franchise can have the access to the Trademark logo of the Franchisor, apart from availing various products and marketing expertise from the Franchise. Owing to all these benefits, I wish to prefer going for the same.