Entrepreneurship and franchising are often called synonyms, but this is by no means true. Entrepreneurship is an integral part of the concept of franchising. The latter in this case represents a specific business organization. That is, a larger company, so to speak, takes a small firm under its wing. A small business in this case can have everything you need but is not viable on its own in the market. In this regard, there is a desire to carry out entrepreneurship in franchising. Certainly, everything is not free and is subject to several nuances. For entrepreneurship, franchising is a definite gateway to the world of big business. It is a unique opportunity to become the owner of something large enough and profitable. In growing markets, especially on the territory of the post-Soviet states, franchising is the fastest way to raise entrepreneurship to the required level of development.
The development of franchising in Russia can be problematic to assess since this type of business is not singled out as a separate one. Nobody maintains a single list, because franchising is often separated from the general entrepreneurial culture. Certainly, some catalogs describe existing firms and their development. But the information presented in them sometimes does not correspond to reality. The existing statistics indicate that the franchising market in the Russian Federation is estimated at approximately 5 billion US dollars. However, experts note and predict a further decline in development. This is due to the fact that the market is flooded with new proposals. Research confirms that franchising in Russia adds 1% to the gross domestic product. In the United States of America, this figure reached 10%. In recent years, the development of franchising in Russia has led to a marked expansion of over 95%.
Selling a franchise is relevant for those who want to promote their offer. This is done to increase the amount of profit, improve the quality of work, goods, services, and the brand as a whole. It also takes place in the matter of competition and expansion. For the sale of the franchise not only to take place but also to be successful, to lead to a result, it is not enough just a business plan. It is only a third of everything you need. You need to be prepared for the fact that you need to lay down a budget with a large number of items. In addition, you cannot do without professional contractors and a team. Selling a franchise can be done in a variety of ways. You can do this for a fee, or free, use the Internet space, or use traditional offline methods. The selling method can be carried out through the media, on social networks, using various types of advertising.
The concept of franchising is quite comprehensive and includes many nuances. Each of them should be discussed in detail. So, franchising is a type of market relation in which the transfer of the right to conduct business and use the developed model is carried out. Certainly, this is not free of charge, which will be discussed below. Speaking of franchising, it would be correct to mention such a concept as licensing. The franchisor, who is also the manager or owner, provides the franchisee-buyer with the opportunity to work under his auspices using several attributes. The essence of franchising is that the parent company, often large, quite advanced, and well-known, finds itself in search of new partners. In such a case, the choice falls on small independent enterprises, which become such. In essence, that is the concept of franchising is inextricably linked with concepts such as relationships, image, and reputation.
First of all, the advantages of franchising are in the reduction of entrepreneurial risks, as well as in the greater survival of this type of business. Statistics have consistently shown that among established companies, almost two-thirds go out of business within the first three to five years. If the company was created within the framework of franchising, then this figure is not even a quarter.