Both newly minted and established businesses feel the need to set up new channels through which they can market their products and services to the people. This is important as such channels help to give proper scope for expanding the business of the company. Therefore, a firm should ideally exploit the opportunities of franchises and establishments in a new country or new region. However, while there are many advantages, there are some limitations as well. These need to be made public to the general public.
Buying franchises in new locations and regions will give an opportunity to the companies to make their presence felt in new markets. This means that using franchises and establishments, they can enter into new markets and tap the demand of the foreign buyers and consumers. They can carry out their advertising and marketing activities which will help to further strengthen the existing base of customers. And such international operations will help to earn goodwill and reputation. Therefore, goodwill is also advantageous.
To address the issues of distribution and warehousing in new markets and regions, one can set up establishments and franchises. Here are some common strategies. The Company can set up supply points in the new regions to facilitate easy supply of the goods to people. The Company can also set up warehouses and storage facilities for its cross-nation operations of supply and distribution of goods and services. So, using these strategies, a company can solve the problems of distribution and warehousing.
Often, investment in franchise business fetches great returns. But there is always a great risk associated about investing in franchises. The concerns may be for the following aspects. Due to poor economic and political conditions, a new franchise in a new region could suffer from bad business. Sometimes, setting up franchises is cost-prohibitive and expensive. Often, the franchises turn out to be liabilities and there are no profits. The domestic companies may give a lot of tough competition to a franchise.
The royalties are paid to the original owners of franchises when their establishments are rented out to new companies and corporations. Paying expensive royalties for franchises will turn out to be quite cost-prohibitive. The expenses on royalties and other such expenses will hamper seriously the profit s and earnings of the company. Therefore, royalties on setting up franchises can turn out to be quite a major deterrent for businesses in this region.
Both newly minted and established businesses feel the need to set up new channels through which they can market their products and services...