(1) Business plan
As mentioned earlier, a business plan is an overall plan that systematically describes the entrepreneurial project or the business activities of an existing enterprise in the coming period. Franchise as a strategic decision of the enterprise, it is necessary to formulate a corresponding business plan as a programmatic document for the enterprise to carry out franchising.
It should be noted that the business plan of the chain operation is different from the business plan of the original products and services. Once a company enters the chain operation field, its products are transformed from the initial products and services into franchises, or franchise outlets.
It is often said that the products of McDonald's stores are fries and burgers, while the products of McDonald's companies are McDonald's stores.
Therefore, when preparing the business plan of the chain operation, whether it is market conditions, competitive analysis, or the allocation of human and financial resources, it must be subordinated to the new strategic goal of recruiting and managing licensees.
(2) Capital and manpower requirements
Although the early chain operation has a significant "quasi-financial" attribute, that is, the chain headquarters exchanges the investment of many franchisees in the channel network in the form of authorization, and the chain operation itself still requires the enterprise to have the corresponding financial resources and human resources.
Many enterprises that adopt the chain operation model will set up a special investment department and a channel management department; and even adopt a management structure of full investment promotion, which means that the company allocates all strategic resources in the direction of chain operation.
(3) Management capabilities and structural design
Once the enterprise takes the franchise as the development strategy, it requires the enterprise to establish a corresponding management system and enterprise structure for the particularity of the franchise business.
Generally speaking, the special requirements put forward by chain operation enterprises in terms of management ability and structure design are reflected in the following aspects:
(1) Chain headquarters sales (investment promotion);
(2) Franchisee training;
(3) Site selection and construction of outlets;
(4) Shop opening assistance;
(5) Regulatory compliance;
(6) Franchisee monitoring;
(7) Franchisee services;
(8) Conflict prevention and resolution;
(9) system marketing and advertising;
(10) Technical support.
(4) Expansion plan
For enterprises interested in chain operation, it should be understood that the chain operation relationship adopted by different enterprises under different conditions is very different, from simple trademark authorization to long-term in-depth management and support, there are countless specific combinations of strategies.
As a channel expansion strategy, the common alternatives to chain operation are as follows.
1. Fully direct chain
Also known as vertical integration chain, upstream enterprises take direct channels, which can avoid the so-called double marginalization phenomenon and maximize channel profits. The disadvantage is the financial and talent dilemma.
2. Joint venture method
Established joint venture stores with local investors. Since these investors have the interest in the joint venture, they are more active and proactive in participating in the operation and management of the outlets, which can avoid the inefficiency of the managers of the direct outlets.
The disadvantage is that when there are more joint venture outlets, the property relations and legal structure of the headquarters enterprise will be too complicated and difficult to manage.
3. Independent franchisees
For many low-cost, low-priced, weak service factors of consumer products, it is more suitable for distribution through non-exclusive independent distributors.
For this type of production enterprise, adopting an intensive channel strategy is often the best option. This approach is not suitable for the distribution of intangible service products.
4. Channel cooperatives
In certain industries, upstream producers work with multiple retailers to establish retail cooperatives and grant such cooperatives a limited use of trademarks or rights.
This approach is similar to the first free chains that appeared in Japan, where retailers initiate their own initiatives to gain economies of scale, and then negotiate and sign contracts with suppliers.
5. E-commerce
Relying on the Internet, join existing e-commerce platforms or establish self-operated e-commerce platforms.
The advantages of this method are: it can establish a direct interactive relationship with customers through the e-commerce platform, and obtain market feedback information more effectively; from procurement, production to operation and distribution, to achieve information integration of the whole supply chain; and to adapt to the rapid expansion of the market and customer groups.
In short, when choosing a channel strategy, chain enterprises have a variety of options to choose from, which can be fully evaluated according to their product characteristics, market conditions, business philosophy and other factors, and can also be combined with a variety of channels.
Chain problem, Uncle Qiang solves
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