An important factor in considering a franchise is deciding if you prefer a big or small franchise system.
What are some Pros & Cons of dealing with Bigger Franchise
Pros of Big Food Franchise:
Brand Recall from customers: When you buy a well-known brand, you inherit a list of customers who might have been using the product or service for a very long time. However, this point is valid only when there is a much bigger brand value such as some brand which is more than 10 years old.
Negotiations will work in your favor: Having the weight of a big name brand behind can help you get real estate faster. Commercial real estate representatives are generally happier to deal with the prospect of having a big-name tenant.
Initial Capital becomes easier to collect: Bankers are more apt to lend you money for startup and expansion, because they already know the brand and might be more comfortable with already knowing the concept of the business.
Cons of Big Food Franchise:
Big brands calls for bigger investment: Big brand names mean big bucks are to be shed by the franchise owner. The setting up of systems are more expensive to set up, and the franchise fees and royalties may be a little higher than average. Also, they are much more strict with the Franchise Disclosure Document.
A big-name franchise can be more corporate in nature: Bigger brands can be less personal to the franchise owner as compared to smaller, less-known brands. The new or first-time business owner may actually benefit from the hand-holding that happens within smaller food franchise companies.
What are some Pros & Cons of dealing with Smaller or upcoming Franchise
If we talk about Indian market alone, there are lots of upcoming food brands which are making their way to potential and upcoming business entrepreneurs. The idea of franchising in the food business is much more fruitful than owning the business completely especially if one has low amounts to invest.
Pros of Upcoming Food Franchise:
Low-Risk Investment: The upcoming franchise charges a much lesser fee to set up and lesser Franchise fee. The ideal would go with brands who have a good business model which is scalable and starts benefiting the owner at least in 6-8 months. Similarly, the royalties in the longer run might be less compared to what Bigger brands charge.
They push the brand harder:
The teams and the owners have similar goals to push the brand up together. Where bigger brands have more set ways of doing promotions, marketing, Upcoming brands are more open to using non-conventional methods of marketing which works in the favour of the owners.
Inherited system support:
Whether it is an upcoming brand or smaller brand, ambitious franchisers has already set their systems for operations, equipment required, dedicated teams to run verticals which then passes on the franchise owners. For first-time business owners or serial entrepreneurs, this kind of opportunity works the best.
Upcoming brands are for the common man who wants to be an entrepreneur:
Investing in a new concept sounds risky to many owners but upcoming brands are friendlier to anyone who has the zest to put in the hard work and raise the business from scratch.
Cons of Upcoming Food Franchise:
Might not be tested model- Some Franchises are brand new in the market which lacks in the trust factor and solely depends on the owner’s discretion.
More money into marketing- Not being a well-known brand, it can put pressure on the Franchise owners to pump in more budgets to push up the brand.
So, what would be ideal to invest in?
The answer is simple, it majorly depends on the person who is investing, what his needs are, how prepared he is with the budgets? If someone has huge capital and wants to go with a more traditional approach, the bigger brands seems a better option and if one has a comparatively lower amount of capital to invest
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Food Franchise IN 