Once the extraordinary period is over, there will be retaliatory entrepreneurship and retaliatory joining, all you have to do is to remain optimistic, accumulate energy, and make all preparations for the rare career development opportunities.
The frenzy of franchise development
When you are in the lowest valley, the next peak must appear.
At present, the domestic market can be said to be the lowest point of franchise development. One is that a large number of stores have closed down, entrepreneurial passion has cooled, and confidence is lacking. The second is that there is no business and no income. The money in hand is reserved. In a state of stagnation, such as OPP entrepreneurship briefing sessions, project investment conferences, franchise exhibitions, public courses, field trips and other methods cannot be carried out normally. In fact, the Ministry of Commerce’s corporate filing information shows exactly the same.
But one or two months later, the Chinese market will usher in the largest development frenzy in the history of China’s franchise practice in 33 years (marked by KFC’s entry into China in 1987). why?
First, learn from it. You will find that the companies that have been screaming on the Internet recently have one thing in common-they are almost all directly operated stores. Because the direct management of heavy assets, high risks, and slow returns, once encountering an extraordinary period, all losses and costs must be borne by themselves, and the pressure is too great. However, franchisee is responsible for the company’s losses, including inventory losses and losses caused by inability to operate. Therefore, this part of the people who originally did or intend to do direct management will learn lessons and turn to join.
Second, just need is still there. Looking at it now, it is an unavoidable fact that a large number of stores are closed, but the rigid demand of consumers for these stores still exists, so there will be a frenzy of store openings after the epidemic. There are only two ways to open a store. One is to open the store by yourself, and the other is to join. In contrast, the risk of joining is low and the speed is fast.
Third, investment promotion efforts will increase. Many companies have suffered large losses and borrowed money from banks. Once the epidemic has passed, it will definitely increase investment, which will also add a boom to the franchise market.
Fourth, support for policies and regulations. Many industries have been impacted during the extraordinary period. Companies have crashed, employees have been unemployed, and business has been damaged. Once the epidemic has passed, the country will definitely take action and fully support everyone in all aspects to open stores, start businesses, and join.
If you seize the opportunity, your life will be completely changed, but the first and foremost thing is to understand the franchise immediately.
There are several basic misconceptions about franchising.
First, the difference between franchise and chain. Many people think that the chain is divided into direct sales, voluntary and franchise. This is a false perception. The difference between franchise and chain is at least two points: one is that franchise operates in the first, second, and tertiary industries, while the chain is only in the third industry, which is divided into retail and service industries; the second is that franchise is as early as China It was there during the period of Zhou Liwang, and the chain is a matter of nearly 100 years. The conclusion is that franchising is the advanced stage and soul of chain development.
Second, the boundaries of concessions. Many people can only think of franchise, McDonald’s, KFC, 7-ELEVEn, Starbucks, Costco and so on. In fact, all your resources should and can be franchised. You can divide the resources you have into two categories, tangible and intangible. Tangible resources include equipment, machines, products, raw materials, manpower, and decoration; intangible resources include technology, culture, patents, and business models. Number them individually and pull out a resource list. After that, you can do three actions.
The first is a single resource franchise. Such as products, equipment, machinery, decoration, employees … Sometimes if only one of them is licensed, it may get huge benefits in extraordinary times. For example, “shared employees” is essentially the use of personnel.
The second is the franchise of combined resources. The lowest level is OEM or outsourcing. For example, in a restaurant, if there are only two stoves, only 100 meals can be produced per day, but the total number of customers is 200, which cannot meet the demand. How to do? The combination of franchising can be solved instantly. You can provide the ingredients to the treasure moms at home, teach them how to cook, and let them prepare it for you.
The third is the overall resource concession. It is the combination of tangible and intangible resources, and the entire franchise is also called whole-store copying, and the normative statement is called business model franchising.
Third, physical stores are not as good as Internet companies. There can be more trading options online, but in many cases the final consumption will still be in the physical store, because there are still some semi-products. What is a semi-product? For example, computers are all products, and you can assemble and use them yourself. But if you buy air conditioners, range hoods, etc., can you install them easily when you get home? Physical stores have closed a lot, but e-commerce has closed more. Furthermore, you need to know that the closing of a physical store is not because the e-commerce is strong, but because the physical store is too weak, and you need to establish the correct physical store business thinking.
Fourth, it is better to make money by joining the franchise. For example, when McDonald’s selected a quarter, its direct sales revenue was 3 billion, and franchise revenue was 1.5 billion. Who earns more? You have to understand, this is just revenue. If we remove all kinds of costs, taxes and fees, the final net profit of the direct store may be only 500 million, and the net profit of the franchise store may be 1.2 billion. You must keep in mind that the end result is profits, not revenue.
Fifth, joining is not well controlled, and direct management is well controlled. What’s the truth? First remove the word “control” from your consciousness. Why? The franchise is transferred instead of sold. The licensee is the consumer of the special product such as the franchise. You want the consumer to be loyal to you and the consumer to be your fan. You should use “control” Words, this method? Therefore, it is necessary to replace “control” with “service”. We exist to serve franchisees, and to make franchisees valuable and profitable.
Sixth, franchising is cloning and copying. In fact, the real franchise should be thousands of stores and thousands of faces, much the same. Some resources must be consistent, while others must be inconsistent. For example, it is the same for restaurants, it may be a little lighter in Guangdong, you can hardly add salt in Fujian, you may put some sugar in Shanghai and Nantong, you may put more soy sauce in Beijing, you may add some meat in the Northeast, and you may add it in Sichuan chili……
Seventh, there are only two types of franchise stores: direct sales stores and franchise stores. The truth is that there are at least 16 types of stores! The rights of a store can be divided into two categories: property rights and operating rights. Among them, there are at least three investors (property rights) of a shop: franchisees, franchisees and third parties; similarly, there are at least three operators (operating rights): franchisees, franchisees and third parties. Having said that, we can make the portfolio ourselves. Some stores are invested by franchisees and can be operated by third parties; some stores are jointly invested and operated by franchisors and franchisees, or are franchised or third party Operation; of course, there are three types of people investing together, please ask one, two or three of these three types of people to operate …
With so many combinations, which shop should I open? In fact, you only need to adhere to the two principles of opening a store: one is to open more stores, and the other is to make each store profitable. Therefore, in order to open more stores, whoever has the money, let anyone invest, and in order to make each store more profitable, whoever can better run this store is allowed to run.
For example, there is a potential franchisee who is particularly rich, but he does not have time to manage, and the franchise requires that the franchisee must be fully invested, so naturally the investment can not be negotiated. How to do? This franchisee can make money to open a store, or even open 10 stores, and the franchisor can help find the operation team. If it doesn’t work, let his team top. Another example is that there is not enough money for potential franchisees, and 200,000 investment is required to open a store, but he can only take out 50,000 at most, but his operating ability is particularly strong. At this time, the method of separating the two rights can be used. A person or a third party voted to help him open the store and then run it. If you follow the traditional investment thinking, these two kinds of people will definitely be screened out, because they do not meet the conditions in the traditional sense, but these are actually the best quality franchisees.
Eighth, you cannot do franchising. Some people say that their industry and type of organization cannot be franchised, such as websites, schools, associations, etc. Yes, only companies can franchise business models, but this does not mean that you cannot use the franchise model for your development. The website can also set up branch sites in each province and city, and schools can also set up branch campuses or campuses throughout the country. This era has become the era of “points”. Your distributors, agents, offices … These points distributed everywhere are actually the concept of franchise stores.
Ninth, franchising is a channel. Franchising was indeed used as a channel at the earliest time, but with the development of the times, franchising has gradually become a business model, and then it has become a kind of thinking and wisdom. Franchising has gone through seven stages of development. One is a government franchise in feudal society, the other is a commercial franchise in 1865, the third is a comprehensive resource franchise, the fourth is a business model franchise, the fifth is franchising, and the sixth is a “big franchise.” Seventh, China’s franchise thinking.
What is a grand franchise? The traditional or western business model franchise is the main line, integrating the advantages of business models such as distribution, agency, direct sales, O2O2M, crowdfunding, crowdsourcing, cross-border, circle, free, new retail, supplemented by e-commerce, big data, New franchise model of advanced technologies such as cloud technology, RFID, AI, AR, VR, and even blockchain. In short, it is to integrate the old model, new model, science and technology, and modern business philosophy.
Now, I have calculated the franchise from store to point, separation of two rights, replication algorithm, single store profit model design, business district positioning, model selection, cost, cost, area, etc. Like management, this is the development direction of the discipline of franchising.
Five-step approach to building a franchise system
In the first step, there are three things: research, strategy, and work plan. The survey includes internal and external transfers. The external transfers include at least a dozen items including industry, macro environment, competitors, and consumers. The internal transfers include corporate headquarters, branches (regional franchisees, single stores, direct-operated stores, etc.), personnel, finance, Production, supply and marketing, value chain, etc.
After the survey, a “four-in-one” document will be issued: the first is a feasibility analysis report, the second is the business plan (BP), the third is the strategy (including the headquarters and the single store), and the fourth is the business model. Among them, the business model is divided into at least four major parts, from small to large, the first is the industrial chain, the second is the channel, the third is the chain, and the fourth is your store. Then, you need to make a complete work plan, specifically who and what to do at what time.
In the second step, there are two things: one is the introduction of ideas, and the other is creative design, standardization, and manuals. Including six pieces of content: profit model, single store, headquarters, branch (regional franchisee), system framework (overall), franchise. These six pieces must be done in order. After completion, a variety of manuals will be formed, turning all people’s governance in the enterprise into a mechanism.
The third step is the launch of the Creative Standardization Manual. Where did it fall? One is the model shop, and the other is the headquarters. In this step, at least three goals must be achieved, one is physical operation and success, the other is the consistency of manuals and practices, and the third is to train the headquarters team and the single store team.
The fourth step is to establish a business invitation system and a replication system. The strategic and tactical planning of the investment promotion system has formed at least 6 manuals and 7 contracts for franchising. The replication system also includes three aspects. The first is the “construction” system, that is, from the investigation of business districts, market analysis, site selection, decoration, to the application for permits, recruitment, and opening to business. The second is the training system, including the training system before, during and after joining. The third is the logistics distribution system, which includes at least four sub-systems: procurement, storage, transportation, and planning.
The fifth step is to build three more security systems. The first is the supervision system for supervision and guidance. The second is the TQM (Total Quality Management) system, which can ensure the sustainable development of the enterprise for life, rather than a fleeting one. The third is the system of law. Franchising requires both the legal and the business.
This is the new five methods of constructing a franchise system, which has a limited space, and only the essential parts are briefly summarized here. In short, we must focus on practicing internal skills and accumulating energy to prepare for the golden period of the upcoming franchise development.