All You Need To Know About Furniture Franchises
Furniture franchises have become popular in recent years. The business model seems to benefit the owners, franchisees and customers. 'How?' you may ask. Below is an article detailing the advantages of furniture franchises.
To The Owner
If you own a furniture business, one of your concerns would be the capital involved in expanding your business. Typically, you must lease exhibition and office space, purchase stock, apply for licences and hire new employees. In most cases, you would resort to bank loans if you cannot raise sufficient capital. However, given that your business might not pick up instantly, you risk closure before it becomes profitable. Franchising prevents you from incurring massive expenses since the franchisee contributes a specified amount towards opening the store.
Franchising also prevents the stresses associated with operating numerous furniture stores. For instance, you might not have the time and resources to ensure uniformity in operations. However, once you franchise the business, the franchisee is bound to comply with the operating contract since they could lose the store. Moreover, you share risks with the franchisee. For instance, if the store makes a loss, both parties bear liability based on their shareholding. You also repay loans based on your stake in the business.
To The Franchisee
Although you might have sufficient funds to open a furniture store, you could lack the business expertise required to build a brand name and grow sales. This is the primary benefit of buying a franchise. As a franchisee, you take advantage of the reputation of an established business. Therefore, you do not need to spend your time and money on marketing and PR. Another advantage of being a franchisee is using a tested and successful business model to run your store. Ideally, the franchisor sets regulations on how to run the store. For instance, they propose employee relations policies, the price points of various furniture, how to stage the exhibition and the store's operating hours. It helps you avoid a try-and-error approach to managing the business.
To The Customer
Franchises significantly benefit the customer. One of a customers' worries is access to their favourite furniture store. For instance, they may not find a store in a new locality after relocating. Once a business decides to franchise, it gives customers ease of mind since they know they can easily access their favourite furniture items. A franchise can also provide significant discounts compared to sole-operated furniture stores. It is especially so since the business takes advantage of economies of scale. Moreover, a franchise can offer valuable services such as free shipping to its clients.