An Introduction to Fashion Franchising
When you want to approach an expansion strategy for your fashion brand, there are a series of challenges to face with. For instance: How are you going to adapt your products to another country with a different culture? How are you going to face the banking and transaction challenges?
To solve these problems, or even better, try to prevent such problems, the answer is franchising your business.
Fashion and clothing are among the most competitive industries globally, gathering together numerous noteworthy international enterprises. Some consider it one of the biggest industries with a global market value of 759.5$ billion. In this market, many try to develop their business by different means. The most adopted one in franchising, a legal measure known to be practical in order to retain the balance between capital contribution and keeping control over subsidiaries.
In January 2006, the Financial Times published a story about Gap, the US clothing retailer, announcing its “first-ever franchise agreement” with the purpose of expanding into Asia, starting in Singapore and Malaysia. Today, based on the company’s reports, Gap has expanded its presence through franchising in more than 40 countries all over the world. You can see how franchising can make a difference when it comes to business growth, but what are the advantages of franchising in the fashion industry? How can one be sure to profit from such agreements?
A franchising contract can help new businesses run more efficiently. A franchisor can provide the new team with information regarding the market insight, customer point of view, etc. It usually owns enough resources to ensure novelty in business. The franchisor also helps with initial capital contribution and guides the new team through possible challenges.
However, for the franchisor to benefit from a franchising contract, some points must be considered. First, it is essential to know the possible consumers in the franchising destination. In addition, the company should be vigilant when choosing a franchisee since the franchisee represents the main company. It should also be noted that the terms of the agreement guarantee implementation of the brand’s standards. As for the last step, the company must monitor the performance of franchisees and build a productive relationship with their teams.
Why Choose a Franchise?
Let’s start with a fundamental question. What guarantees the success of a new business in fashion and clothing? One obvious answer is knowledge. Having an insight into different aspects of a business can have a massive impact on the financial outcome. In the fashion industry, newcomers must consider studying the market, materials, and customer choice. Gathering information on these topics and other factors affecting business requires a considerable amount of monetary and human resources, and it also takes time. However, this kind of insight can automatically be obtained while working in the industry.
On the flip side, a franchiser that is typically an experienced and influential actor in the industry and has observed the evolution of the market for years certainly has a better understanding of the situation of the new businessman and how to optimize the efforts in order to reach high levels of productivity. In this situation, mentoring plays a key role. Experimental evidence supports the strong impact of professional mentoring on the success rate of new business groups.
Conclusion:
Have a positive approach to franchisees: the brand owner must have in mind that the franchisee is a part of their team and partner in the business in the big picture. For that reason, whatever the company does in an effort to empower franchisees and help them keep business going will literally contribute to the growth of the main company. Therefore, it is reasonable for the franchisor to maintain a positive relationship and support the franchise as far as possible.
Check this out if you want to read more about franchising agreements:
6 Essential Elements of Franchise Agreement
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