A Traditional Franchise Business Got An Upgrade – Meet Virtual Franchise Businesses.
Over 70 years, the franchising has stayed the same. The franchise business model still works great for big brands like McDonald’s and Starbucks, but for smaller businesses, it’s not so great anymore.
“In the last 20 years, everything has changed, and businesses went online. However, the internet hasn’t changed the way how franchise businesses models work.” – Connor Wilkinson, CEO of G6
Meet the next generation of franchise businesses “Virtual Franchise” which aims to have a solution to all current problems.
The virtual franchise is a new key industry and sits well in front of the primary trends, bridging Self-Employed type with the Business owner/Investor quadrants. Self-employment is accelerating around the world as large groups of people continue to be excluded from the ‘job’ market. To them, this type of business is a very attractive option.
As the name conducts, this kind of franchise can be run and operated virtually. This means you don’t need to rent an office or a store-space to run your business. In this type of franchise, you can hire freelancers to work for you, and even they can work from their own home.
How traditional franchising works?
To understand how Virtual Franchising works, it may be helpful to think of a business model that most consumers are familiar with, Conventional Franchising. Franchising is a type of business model a new business owner uses the same business model and name as an existing Parent Business. It involves a franchisor and a franchisees. This type of business is commonly used in retail stores, restaurants, and many other types of businesses.
A virtual franchise is a perfect solution for smaller businesses. If you own a small local business and don’t know how to expand without spending your entire savings, become a franchisor.
What are the costs?
When a business decides to start franchising, it will offer the business model for sale to prospective business owners. Entrepreneurs who wish to start a business can pay a certain amount of money (from 10K to 1.5 Million) and purchase the rights to open a franchise in the same business model. They pay for the right to do business using that company’s products, services, and name. The parent company agrees to provide the owner with training, development, advertising, and marketing support. Also in return for the franchise fees, the franchisor is going to provide valuable business information to the franchise. The franchisor has already created a successful business model and he or she is going to convey all of the necessary information for the franchise to become successful as well.
Virtual franchise reduces starting and running costs significantly, by taking out the need of having an office, store space, storage units, and even you don’t have to legally register a new company to operate. Since the virtual franchise is beneficial for both franchiser and franchisee, the initial amount to purchase the license of becoming a franchisee is tens of times lower than in traditional franchise models. You can get the license from just $250.
One of the big advantages of starting a franchise is that the business owner is not going to have to create a new, successful business from scratch. He or she can simply follow the detailed plan that has been laid out by the original company. While the name on the outside of the building is that of the parent company, the actual location is privately owned by an independent business owner. The franchises will typically be distributed in different geographical areas.
With virtual franchising, even in the same city, there can be many different franchisees to run the same business. In the franchisees can work together and instead of competing, collaborate to reach wider audiences of people with less effort. For brands and small businesses, with the franchise model, it is easy to expand your business to many locations.
In traditional franchise, the franchisee has to pay the franchisor an ongoing monthly sum in franchise dues. Many times, the franchisee
will also have to buy products and equipment for the business from the franchisor. Besides it requires spending a loaded amount of time
for training before starting this enterprise. There are no guarantees after all, that it will work out for the business owner and get will get back his money. This type of franchising will experience the overheads that any traditional model does leasing costs, accounting costs, hiring and training employees, employee tax remittances.
In a virtual franchise, there’s no need to buy special equipment to run the business. The web platforms and payment systems will be provided to you by the franchisor, who asks maintenance fee every month. By saving on all the traditional fees, you can concentrate on online marketing and even if the business will not work out, you haven’t lost thousands of your precious money.
The main advantage for franchisor here is leveraging business, gaining residual income that will be generated when new independent franchising outlets opened and functioning.
If you are interested in starting a virtual franchise, there are several options. Most popular is FrangioUS platform, which connects communities of people with franchisors – https://frangio.us/
There are also some individually popular virtual franchise businesses like LECIL Investments – https://franchise.lecil.net/
and Juice Plus+ – https://www.juiceplusvirtualfranchise.com/