Supply and demand must be balanced. When a business decides to franchise, we assume that it is because there is a big demand which can be met by the new franchises. This principle of supply and demand is similar in any type of business.
The franchisee must demonstrate to the franchisor that he has sufficient financing capacity to take on the project, as well as the necessary capacities and skills to carry out all procedures, in terms of both commercial activity and management.
When choosing the location, the franchisor will indicate the criteria the franchisee must follow: decoration, size, characteristics etc. They will also communicate the fact that the uniformity of a franchise is created in large part, by its brand image, so all franchises must follow the same aesthetic guidelines. In addition, the franchisor must also approve the area, which will depend on the distance from competitors and with other franchise locations, among other aspects.
The franchisor, for their part, will have to prepare a franchise manual in which they communicated the values and success factors of the business , which will have to be communicated to franchisees through training. They must also promote their brand image and demonstrate to franchisees that they have sufficient financial solvency to maintain this type of business.
The franchise agreement
Royal Decree 201/2010, of February 26, regulates the exercise of commercial activity under the franchise regime and the communication of data to the registry of franchisors. The decree states the agreement to be “the contract by which a company (the franchisor), transfers to another (the franchisee), in a given market, the right to exploit a franchise for business or commercial activity, in exchange for a direct or indirect financial consideration, or both. The franchisor has previously been developing the business with sufficient experience and success, to market certain types of products or services ”. The contract must show all the rights and obligations of both parties.
Examples of successful franchises which require a small investment
Investment is often the first obstacle faced by an investor looking to set up a franchise, so it’s necessary to choose where we want to invest well. At present there are several successful low cost franchises that don’t require a large investment. Here are some examples:
Business dedicated to weight loss treatments. Size Zero stands out for its innovation and sophistication. They have been operating in Spain for a couple of years and the initial investment is just above 13,000 euros.
Devuelving is the first online franchise store. It gives the franchisee the possibility of setting up their own online store in which they will offer consumers popular products from top brands at low prices. A large advantage of this business is that it doesn’t require a premise, rent or subsequent costs. The necessary investment is 3,265 euros.
This franchise has more than 1,000 establishments around the world and is a recognized brand. Naturhouse has years of experience in the dietetics and nutrition sector. The initial investment in this case is just over 11,000 euros.
Pulsazione offers beauty centers based on the quality of the technological devices used for treatments. This is a clear example of a successful low-cost franchise, as the necessary investment is just below 6,000 euros. This brand allows investors the option of adapting each center to suit them.
CityPlan is an app in which users can use to be informed of all the news and entertainment in their town. Shops and companies can advertise in the application by providing images, videos, information, geolocation … in addition to the possibility of sending notifications to users about offers and promotions. The initial investment ranges between 1,400 and 3,000 euros.