Without franchising, renowned brands like KFC (from the United States) or Nando’s (from South Africa) were unlikely to have established a presence outside their country of origin. Thanks to the franchising model that a business from one country could think of exploring potential markets in other countries. Franchising also takes place among domestic businesses. Pick n Pay, one of the largest supermarket chain store brands in South Africa, also operates via the franchise route in the country.
In essence, franchising is two or more businesses working together for mutual benefits. While bigger brands gain in terms of localization, risk optimization, market expansion and penetration, reduced operational costs, core competencies, and integration, smaller players get the brand tag of reputed domestic and foreign companies, access to modern technologies, and the exposure of working with advanced business management systems.
Done right, franchising is a win-win game. However, things may not always go right. Even the franchise consulting services out there know this. There are certain standards and processes to be followed. There are challenges to be acknowledged and addressed.