Question

Why franchising is considered a major force in our economy? What factors would you consider if you are thinking of starting a new franchise business in the healthy fast food industry in your city or town?

Answer 1

Franchising is a major force in the economy since it helps in strengthens the brand, making the product easily accessible, creating jobs and even creates revenue for the parent company. It even acts a strong competitor since having the location at multiple locations gives the geographical and linguistic advantage to the business as well.

Factors to be considered for taking the franchise business in the healthy fast food industry:

1 The purchasing power of the customer

The purchasing power parity of the customer must be taken into account. The healthy fast food chain should supply according to the demand and the purchasing capacity of the individuals.

2 Logistics:

The availability of organic raw material supply, warehousing, sound transportation is a must when planning to start a franchise.

3 Supplier:

The supplier of raw material should be in the nearby thereby eliminating delays in production.

4 Cost-Benefit analysis:

The cost-benefit analysis should be considered such as franchise charges, fixed cost such as land labor etc before making the investment

5 Competitors and other big players in the vicinity:

A sound analysis of other competitors in the vicinity should be made before the franchise is taken. If there are a lot of healthy fast food joints in the area then another location might be opted for.