What is Franchising

Nedbank

6 Jan 202002:41

Summary

TLDRThe video script highlights the benefits of franchising as a scalable and teachable business model, emphasizing its growth and impact on job creation. It showcases the advantages for franchisees, such as brand loyalty, access to suppliers, and ongoing support. The script also underscores the importance of a banking partner that offers personalized service and tailored solutions to optimize and maximize the effectiveness of a franchise business, with Nedbank positioning itself as such a partner.

Takeaways

📢 Franchising is a scalable business model where a franchisor expands through a network of franchisees.
🚀 Successful brands often adopt franchising to replicate their proven concept across multiple locations.
🏪 Examples of franchised businesses include fast food restaurants, fuel stations, supermarkets, beauty salons, and tire service centers.
📈 The franchising market continues to grow annually, with over 5,000 new stores opening in 2018.
💼 Higher ownership by franchisees leads to more job creation, attracting more women to the market and enhancing access to favorite brands.
🌟 Franchising allows brands to reach consumers in new markets with less risk and provides franchisees with an established brand's loyal following.
🛠 Franchisees benefit from startup assistance, training, and the right to trade under a recognized brand name as part of the initial setup costs.
🔄 Ongoing support includes brand and product development, as well as marketing initiatives, in exchange for monthly royalty and marketing fees.
🤝 Success in franchising requires a banking partner who understands the franchising model and can provide tailored solutions.
🏦 Nedbank offers a unique banking approach with a dedicated banker who understands the franchisee's unique situation and provides national support.
📧 Interested parties can partner with Nedbank's franchising team by emailing the CEO for expert support in growing their franchise.

Q & A

What is the primary purpose of franchising in business?
-The primary purpose of franchising is to expand a proven business model to a network of franchisees, allowing the brand to scale and grow with the help of new owners who operate under the established brand name.
What are some examples of successful franchised brands mentioned in the script?
-Examples of successful franchised brands include fast food restaurants, fuel stations, supermarkets, beauty salons, and tire experts service centers.
How has the franchising market been performing in recent years?
-The franchising market has been growing year-on-year, with more than 5,000 new stores opening in 2018, indicating an increase in ownership by franchisees.
What are the benefits of franchising for the economy and job market?
-The benefits include creating more jobs across the country, attracting more women to join the market, and providing better access to favorite brands, which adds value to the people and the economy.
Why is it advantageous for franchisees to join an established brand?
-Joining an established brand offers franchisees several advantages, such as a loyal following, consistency and quality in products and services, access to preferred suppliers, and lower costs, which increase spending power.
What kind of support do franchisees receive from the franchisor during the initial setup of the store?
-Franchisees receive startup assistance, training, and the rights to trade under the brand name as part of the initial setup costs for the store.
What ongoing support and benefits do franchisees receive after the store is set up?
-Ongoing support includes brand and product development, marketing initiatives, and the payment of monthly royalty and marketing fees.
What role does a banking partner play in the success of a franchise?
-A banking partner plays a crucial role by understanding the intricacies of franchising, optimizing the business, maximizing its effectiveness, and providing personalized solutions that suit the franchisee's needs.
Why is it important for a franchisee to have a banking partner who takes a personal interest in their business?
-A banking partner who takes a personal interest ensures a close working relationship, providing tailored solutions and support every step of the way, which is essential for achieving business ambitions.
What unique approach to banking does Nedbank offer for franchisees?
-Nedbank offers a unique approach by providing each franchisee with a dedicated, local banker who understands their unique situation and can make decisions with the support of a national team.
How can potential franchisees get in touch with Nedbank's franchising team for partnership opportunities?
-Potential franchisees can send an email to Nedbank's CEO to explore how the expert franchising team can partner with them to grow their franchise.

Outlines

00:00

🏪 Franchising as a Business Expansion Strategy

The first paragraph introduces franchising as a business model where a franchisor expands their proven business concept through a network of franchisees. It emphasizes the importance of scalability and the teachability of the business model, product, and systems. The paragraph highlights the success of well-known franchises in various sectors like fast food, fuel stations, supermarkets, and beauty salons. It also mentions the growth of the franchising market, noting the opening of over 5,000 new stores in 2018 and the benefits this brings, such as job creation, increased female participation, and better access to favorite brands. Franchising is portrayed as a way to capture new markets with less risk, offering franchisees support in startup assistance, training, and ongoing support in brand and product development.

Mindmap

Keywords

💡Franchising

Franchising is a business arrangement where a parent company, known as the franchisor, licenses its business model, systems, and trademarks to individual entrepreneurs, known as franchisees. In the video's context, it is portrayed as a scalable and teachable model that allows for expansion of a brand through a network of franchisees, which is key to the growth of various industries like fast food, fuel stations, and supermarkets.

💡Franchisor

The franchisor is the company that offers its successful business model for others to replicate under a franchise agreement. In the script, the franchisor is depicted as the entity that expands its brand through the franchising model, ensuring that the business model, product, and systems are scalable and teachable to new franchisees.

💡Franchisees

Franchisees are the individuals or businesses that purchase the right to operate a franchise under the franchisor's brand. The video emphasizes the benefits franchisees receive, such as startup assistance, training, and the rights to trade under a recognized brand name, which contributes to their success and the overall growth of the franchising market.

💡Scalability

Scalability refers to the ability of a system, product, or process to handle a growing amount of work. In the video, scalability is a crucial attribute for a successful franchising model, indicating that the business can expand its operations and maintain performance as it grows, which is essential for attracting new franchisees.

💡Teachable

The term 'teachable' in the context of the video means that the business model, product, and systems of the franchisor can be effectively communicated and replicated by the franchisees. This is important for ensuring consistency across all franchise locations and for the overall success of the franchise network.

💡Market Growth

Market growth is the increase in the size of a market over time. The video script highlights the year-on-year growth of the franchising market, which is indicative of its expanding presence and the opportunities it presents for job creation, new business openings, and greater access to various brands.

💡Ownership

Ownership in the context of the video refers to the control and rights franchisees have over their franchised businesses. The script mentions an increase in ownership by franchisees, suggesting a trend towards more individuals taking control of their business operations under a franchise model.

💡Job Creation

Job creation is the process of establishing new positions within an economy. The video emphasizes the positive impact of franchising on job creation, as the opening of more franchise stores leads to more employment opportunities across the country.

💡Banking Partner

A banking partner in the video is a financial institution that provides specialized services to support the growth and operation of a franchise. The script positions Nedbank as an ideal banking partner that offers personalized services, understanding of the franchising model, and support to help franchisees achieve their business ambitions.

💡Dedicated Banker

A dedicated banker is a specific individual from a financial institution who is assigned to work closely with a client to understand their unique financial needs and provide tailored solutions. In the video, Nedbank offers each franchisee a dedicated banker to ensure personalized service and support.

💡National Support Team

A national support team refers to a group of professionals within a company that provides assistance and resources to local branches or individual bankers. In the context of the video, Nedbank's national support team backs up the decisions made by dedicated bankers, ensuring that franchisees receive comprehensive support at a national level.

Highlights

Franchising is a scalable business model where a franchisor expands through a network of franchisees.

The success of a franchise depends on the scalability and teachability of its business model, product, and systems.

Popular franchise sectors include fast food, restaurants, fuel stations, supermarkets, beauty salons, and tire services.

The franchising market has been growing annually, with over 5,000 new stores opening in 2018.

Franchising offers more ownership opportunities and creates jobs, attracting more women to the market.

Franchising provides access to favorite brands and brings value to people, South Africa, and the future.

For brands, franchising allows capturing new markets with less risk and an established customer base.

Franchisors offer franchisees startup assistance, training, and the right to trade under a recognized brand name.

Franchisees benefit from ongoing support, product development, and marketing initiatives.

Franchisees pay monthly royalty and marketing fees for the support and brand access they receive.

Success in franchising requires a banking partner who understands the intricacies of the business model.

A good banking partner focuses on optimizing the business and maximizing its effectiveness.

Nedbank offers a unique banking approach with a dedicated banker for each franchisee.

Nedbank's dedicated bankers understand the local context and can make informed decisions with national support.

Nedbank's franchising team can partner with you to grow your franchise and achieve business ambitions.

Interested parties can email Nedbank's CEO for more information on how to partner for franchise growth.

Nedbank encourages a different perspective on finance, promoting a 'see money differently' approach.