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Articles de franchise
Date: 15/04/2006
Conversion Franchising

Throughout North America independent retailers and foodservice chains are shedding their independence to become key players in successful franchise systems.

By moving in this direction “independents” will ultimately create a foundation on which to build new business and convey a strong message to existing customers that transcends new trends . . . . . ensuring lasting and predictable revenues, marketplace leverage, and higher profit margins.

Conversion franchise strategy is all about establishing “brand spirit” and its vital energy to the consumer. Powerful brands glow with consistent corporate identity.

Conversion franchising is a strategy designed for franchisors to take advantage of acquiring prime locations in a crowded playing field. This also translates into creating more rapid royalty streams for franchisors.

Typically, a franchisor sells the “independents” the right to use its trademark, brand, business format, and helps them convert their store design, signage, and operating methods to mirror the franchise chain. The franchisor provides support as it would to start-up franchisees and in most cases reduces the franchise fee and assists in the makeover costs.

Besides solving the problem of obtaining prime real estate locations, “conversion franchising” offers franchisors the means to penetrate saturated markets, distribute their exclusive brands, and eliminate competitors.

Conversion franchising can cut store opening time into 45 days down from 90 to 120 days for complete transition. “Ex-independents” can be up and running with existing customers in tow.

The franchisor is able to add seasoned management, volume discounts, brand-name products, and new business technologies. The “independent” will quickly realize that the royalties on sales paid to the franchisor are more than offset by the enormous increase in sales.

The questions a franchisor must address when considering the “conversion” of an “independent”:

  • Does the “independent” have declining sales?
  • No obvious point of difference with competition
  • A prime location lost in the similarities of the surrounding market area.
  • Shrinking margins or even “red ink”

The “independents” must feel that a conversion of their existing replica handbags system must separate them from their competition and deliver the following:

  • A “show stopper” concept
  • Value-added perception and quality
  • Marketing support and techniques to attract the widest number of possible potential customers

The “independent”, after the conversion has been completed, remains the owner and operator of the franchise unit.

The franchisor provides a complete management system and the continuity required in today’s rapidly-changing consumer world.


All Content Copyright ©2006 M-Four International. All Rights Reserved.

Pour plus d'informations, contactez Mme Diane Champagne : M-Four International/consultant

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