5 Common Problems Faced by Franchisor and Its Solution

There are still many people who are confused about what a franchise is, even though the franchise business is currently experiencing rapid progress and development. Especially, for prospective young entrepreneurs as a franchisor, the franchise business is one of the businesses to choose from because the process is not too complicated.

Starting a franchise business is very easy. At the beginning, you have many bright ideas that you can execute well. Furthermore, you will find various difficulties, one of them is maintaining the business. Starting a business is easy, but maintaining is really difficult.

As a franchisor, you need to know the best ways to ensure that your business continues to run well and can continue business smoothly. Here are the factors you need to know.

Read more: 7 tips to improve your franchise business and growth

High enough capital for franchisor

In order to be able to participate in the franchise business on certain products, you must submit initial capital so that you can have the right to use the franchisor’s product name and get the tools and assistance, even though sometimes the capital that must be submitted is considered quite high, this is the biggest obstacle when opening a business. this franchise

Internal problem

Basically a franchisee is someone who wants to increase income, most of them are employees or employees of a company. Lack of time in managing the franchise is an obstacle in running it. The limited time that the franchisee has, will make them employ employees to maintain their franchise outlets, even though to run a business, you are required to handle it directly to be able to find out the problems that will arise.

Brand image problems

Being a franchisee from a well-known brand is an advantage in running a business. However, this can also be a big obstacle when there are already many franchisees who have opened franchise businesses from this well-known brand.

This will potentially cause many problems because with the many outlets and the characters of different owners, when one of the outlets makes a mistake, it will cause a bad image to consumers. It can also be great with the help of sophisticated technology like today which allows consumers to spread their disappointment quickly in cyberspace. As a result, all franchisees who open these trademark outlets will be affected.

Supply problem

In a franchise business, generally, the franchisor will determine the raw materials for production, such as spices that must be taken from certain suppliers or from the franchisor itself. This is intended to ensure that all franchisees have the same product standards.

However, with this process, problems often arise such as delays in the delivery of raw materials to franchisees caused by internal shipping companies and couriers. This delay can seriously disrupt performance in the franchisee’s production process. Generally, to anticipate this, franchisees are asked to order materials in advance, so there is a sufficient lag or time lag for the delivery of raw materials.

To ensure that raw materials are still available, you need to procure raw materials regularly. Unfortunately, this does not work well, because sometimes the capital for the purchase is not there. This problem can be handled properly through the Paper.id solution! With a payment period of up to 30 days, you can shop for franchise raw materials without bothering to pay for them!

Unskilled human resources

Finding the right human resources is often an obstacle in the franchise business, especially in Indonesia. Looking for employees to run a franchise business requires that HR can deal directly with humans. Quality human resources will increase the sales turnover of your franchise business.

Read more: Analyzing the continuity of 3 Indonesian franchises in 2020

Franchise problem

The important point of a franchise business is that you need to pay attention to franchisees. Give regular guidance, especially regarding solving problems that often occur. That way, franchisees can solve problems well, while increasing their profits. This has a direct impact on your business. The smoother the franchisee business is carried out, then you can reap huge profits from the franchisee.

Change of owner transition

In this business, franchisees can be said to be weak. The franchisee is only bound by an agreement for the use of the brand, not the original owner of the business. This is what makes the franchisee’s position weak, especially since many franchisors make agreements when the franchise is purchased by another party, the franchisor is not obliged to ask the franchisee for permission.

Changing ownership is normal and normal in doing business, but with a change of owner there will usually be a difference in vision and mission which of course will lead to new policies. As we know, the new management system can cause problems for the franchisee, the main thing is the adjustment to the system brought by the franchisor’s new owner. These adjustments can sometimes take a long time and can seriously hinder your business trip.

Those are the explanations about what a franchise is and how to manage a franchise business for franchise owners / franchisors. Hopefully your franchise business can run well!