An Advantage That Young Franchises Have Over Larger Organizations

Written by Editor

Most prospective franchisees have the perception that in order for franchising to work, they have to take up a big name franchise where everyone under the sun recognizes the brand. And this is rightly so because acquiring the rights to a business that is associated with a well-known brand name is one of the fundamental attractive qualities of the franchising business model. Besides, taking up an investment always requires a practical approach. So looking at it from just this aspect, it seems almost impossible that a new franchise will ever out-maneuver established ones when competing for the same pool of prospective franchisees. But that’s just one side of the story.

Related: Is Becoming The First Franchisee In A Franchise System A Bad Idea?

Franchises which are already established and well-known, compared to a young franchise, will typically command higher franchise fees with more capital requirements. What this means is that this pretty much limits the investor profile, based on financial ability, to a select group. For those who are interested in investing in a franchise but don’t have the required finances in place for a more established brand, giving a young franchise some consideration instead might throw up some competitive advantages that aren’t apparent at first glance.

In a larger organization, approval of decisions normally includes an evaluation process that involves several department levels or personnel before being given the green light. In a nutshell, larger franchise organizations could be tied down by the very formalities and rules they implement that bring everything to a crawl with bureaucratic hurdles that probably didn’t need to be there in the first place.

On the other hand, while young franchises will also have their own set of rules and formalities, they usually have significantly smaller teams which should result in a more efficient workflow through faster decision-making processes. Furthermore, young franchises, being relatively new, should have more operational flexibility. Even with having already formulated a business plan and strategy, there is nothing to confine them to those original directions. This allows young franchises to be more agile when negotiating through obstacles or reacting to market changes.

You Might Also Like

FRANCHISEE | February 21, 2023

Top 5 Reasons to Consider Career Change to Franchising a Business

Franchising can be an attractive career change option for individuals looking for a new challenge in 2023. It offers a proven business model and potential for long-term financial stability.

FRANCHISEE | December 7, 2022

3 Reasons Why You Passed On That Franchise Opportunity

Running a successful business doesn’t happen overnight. And it also doesn’t happen with just thoughts and beliefs.

FRANCHISEE | December 2, 2022

What Characteristics Do Franchisors Look For In Franchisees During Recruitment?

Recruiting suitable candidates is critical to the success of any franchise business.

Latest on TFA

EXPLORE | October 10, 2023

The Impact of Technology on Franchising in Asia

Asia is one of the fastest-growing economic regions in the world, and the franchisi

SPOTLIGHT | September 11, 2023

How to Choose the Right Franchise in Singapore

Franchising is a popular business model in Singapore, and for good reason. It allows entrepreneurs to own their businesses while benefiting from the support and resources of a larger brand.

SUCCESS | August 30, 2023

Franchise Opportunity Summit: A Platform for Franchising Success

Astreem Consulting, a prominent franchise consulting firm and Top Franchise Asia took part in FLAsia 2023. The event was held from 17-19 August at Marina Bay Sands Convention Centre in Singapore.