Franchises

How Refranchising Can Benefit All Key Players

Offering a win-win Situation
How Refranchising Can Benefit All Key Players
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2 min read

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Franchising has provided a big opportunity to major conglomerates doing business since decades and further booming. But with changing times, many new players are entering the industry, creating opportunities and expanding their business. Allowing everyone to focus on what they do best, franchising is now regarded as the best model for showcasing your business skill.

Re-franchising is a process when a brand starts franchising its own company-owned units for boosting income. It has proved to be a success mantra for many companies, while others explain it as not their cup of tea. A franchisor may have many franchisees for his brand and he may prefer to operate many outlets by himself and not via franchisees. But when the franchisor decides to sell all or several of the company-owned units, it is re-franchising.  

Working condition

Franchisors opt for re-franchising when there is trouble in efficiently operating the network of company-owned stores. Many franchisors believe that it also increases their profit margin, providing them with growth. But it’s necessary for the franchisors to have the knowledge about the brand and their initial strategy, for taking the franchise to the next level. Re-franchising requires proper strategy and skills from the franchisors, helping in liquidity.

Benefits

Both the franchisors and the franchisees experience benefits from re-franchising. Faster system growth, improvement in the financial metrics, and retaining the value of employees by offering them with more chances to succeed are few benefits which the franchisors gain.

On the other hand, franchisees can improve their unit level profits, followed by growth in franchisee’s core brand by entering re-franchising. General Managers (GM) and other staffs career are also enhanced by this procedure. Therefore, re-franchising can be one big step towards achieving your goal, in a faster and skillful manner.

Franchisees are granted the opportunity to grow their portfolios large enough to be able to streamline operations, leading to greater efficiencies, sophistication, and success.

This article was originally published on Franchise India by Shahram Warsi.

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