A franchise can be likened to a good relationship; one between the franchisor and a franchisee. However, a good rapport between both parties is not the only quantifiable measure of the progress of a franchise. Other clear indicators of a successful franchise include system size, growth index and financial strength.
According to the Nigerian International Franchise Association, a US commercial service report on Nigerian franchising states that franchising has seen the most success in recent years in quick service restaurants, distributive trade, fast food, transportation, telecommunication, and hotel services.
Many Nigerian startups and SMEs have leveraged on available franchise opportunities in the Nigerian business market to fast-track the growth of their businesses into orbit. Top franchise businesses in Nigeria include Slot, Tantalizers, Mr Biggs, and Chicken Republic (which are local franchises) and KFC, Debonairs Pizza, Dominos Pizza, Coldstone Creamy (international).
The African Development Bank has also revealed that only 15% of franchised SMEs went bankrupt compared to a shocking 80% failure rate of stand-alone businesses in various sectors of the economy. This huge success rate that franchised businesses enjoy is due to the very inclusive systems put up by franchisors to support business under them throughout its lifespan.
Great franchises like the ones mentioned above have a track record of making sure that any franchisee of theirs enjoys not just the brand name of the franchisor, but also becomes a part of the parent organization. They are exposed to the very best training programs to bring businesses up to speed rapidly, strong marketing support initiatives, popular products, the business model and its invaluable strategy.
It is no doubt that franchising is a breath of fresh air for many new or relatively old businesses. However, it is in the best interest of the business owner [franchisee] to be cautious and follow a simple rule of thumb that says ‘know your industry’ before handing over that franchise fee. Diving blindly into an industry without a clear understanding of how it works is no different from jumping into an ocean with no swimming skill whatsoever.
Also, it is worthy of note that what is good for the gander may not always be favourable to the geese. The fact that a franchise operates in a huge market does not automatically mean it is the best investment for the franchisee. Be sure to make your own investigations thoroughly so you don’t end up putting all your eggs in a large broken basket.
You might also like:
- How To Market Your T-shirt Business Offline
- Consumer Technology: Smartphone Penetration in Nigeria
- 10 Tips for Starting a Dropshipping Business in Nigeria
- Tips for Managing Your Business’s Financial Records
