Every time there is an empty place, it suddenly becomes an outlet for the Mixue ice cream brand. Does anyone know this joke? Yup, recently, we have been surprised by the rapid development of the Mixue brand, which has opened outlets everywhere.

The Mixue business is growing rapidly like this thanks to the franchise system. Interesting, right? Let's discuss first, what is a franchise!

What is a Franchise?

There are many advantages to franchising. But before knowing this, it is better for us to understand the concept of this franchise business.

A franchise is a business model, in which a company or brand owner gives investors the right to use a brand, product, service, operational system, by paying a certain amount of money.

For example, if you want to open a KFC outlet, we can pay a certain amount of money to KFC. Then, they will provide permits and several other facilities that we can use for business.

Hmm, if you hear the benefits of this franchise, it looks quite promising, right? Because you can use big brands, it's not difficult to increase brand awareness. But actually there are advantages and disadvantages to franchising, which you need to know before you start, you know.


Franchise Advantages and Disadvantages

When we talk about the advantages and disadvantages of franchises, of course we will think "wow, there are more advantages, right?". Though not necessarily. So, instead of guessing, first take a look at the franchise benefits below!

Franchise Benefits
It cannot be denied that the benefits of this franchise are many. Below is some more complete information regarding the benefits of franchises!

1. Quickly Start a Business

Franchising is one of the businesses that is relatively quick to start a business. Because usually the brand owner has prepared operational systems, product stock, outlets, and even capital loans in collaboration with banks.

2. Get Training and Support

The next advantage of a franchise that you can get is access to training programs and skills for running a business. This is of course very necessary, especially if you are a 'new player' in the business world.

3. Get Free Promotion
You will get franchise benefits in the form of free promotions. If you are still just running a business and have little understanding of advertising and marketing, it would be better to do business with a big brand. If the center carries out a promotion, you also don't need to pay for the promotion.

4. Opportunity to Get a Big Bank Loan

Reporting from smesta.kemenkopukm.go.id, banks like customers who borrow money for franchise businesses rather than starting a business from scratch. This is because the advantage of a franchise is the minimal risk of failure.

5. Have a Professional Partner

One of the advantages of a franchise is that you have a professional business partner, namely the owner of the brand itself! Of course, the owner of this main company already has experience in running the business. They will help you by providing the facilities you need to run your business.

6. No Branding Required

Opening a business with your own brand requires extra effort to increase brand awareness, you know. Brand awareness or the degree to which people know about your brand determines whether they want to buy your product or not.

If they don't know that your brand exists on this earth, they won't buy it, right? This is different from big brand franchises, where public knowledge of this brand already exists. So you don't need to be tired of massive promotions!

7. Proven Operational System

One of the advantages of a franchise that you should consider is an operational system that has been proven successful. If it wasn't successful, surely the brand wouldn't be as big as it is, right?

8. Minimal Risk

Brand awareness already exists, has support from the brand owner, the system has been settled, so of course the minimal risk of failure is one of the advantages of a franchise.

9. Easier Business Management

The advantage of a franchise is that management is easier. Because the brand owner has established a financial management system at the central franchise. You just need to continue using the existing system.

10. Business Network

One of the advantages of a franchise is that you can get business connections or networks. Which, you can use if you want to create another business, or develop an existing business.

Franchise Losses
If earlier we discussed the advantages of franchises, now let's look at the disadvantages!

1. Requires Large Capital

Apart from the quick benefits of a franchise, this business requires quite a bit of initial capital.

2. Agreement with the Franchise Owner

As a franchise buyer, you certainly cannot have full control over the business. This is because the franchise owner already has rules and systems that you must follow.

Actually, this includes franchise advantages as well as disadvantages, depending on where you use it.

3. Limited Creativity

The impact of having an agreement with the franchise owner is that you cannot be creative with your business.

4. Dependence on Brand Reputation

Even though the advantage of a franchise is that we can make a profit from a big brand that already has a long history. However, on the other hand, if a big brand's reputation declines, this can affect your business too.

5. Cut

Profits

One of the advantages of a franchise is the small risk of loss. However, franchise buyers have an obligation to pay royalties. So, if the profit obtained is small, then the profit will still be reduced to pay the royalties.


Example of a Franchise Business

Seeing that the advantages of a franchise are still quite large compared to the disadvantages, there's no harm in trying, you know. Here are some examples of franchises that you can join.

Culinary: Iced Tea, Kebab Baba Rafi, Sabana, Boba Tea, and Mixue

Retail: Indomaret and Alfamart

Franchise Business Regulations in Indonesia

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