Franchising in rural areas- 2

How do you replicate?

Here comes point 2:

  • In order to make somebody become a franchisee, you have to show clear indication of ROI, SOP and Pull factor (great brand/great product).

I am assuming your model has a good ROI, SOP and a great product or else you wouldn’t think of franchising it!

How do you build a brand?

Given the fact that the rural areas are geographically separated and it is difficult to identify a shared sentiment across all geographies, it is difficult to build a brand which is recognised by everybody, something that everybody in different rural corners would identify themselves with. It will take a lot of time. Better idea is to build a brand image which is influenced by location. Can we think of running an advertisement of a service like dairy healthcare services as a model franchisee brand on national television? You need a lot of money and you would be paying for the eyeballs of a large number of people (urban) who have no intention of using the information! Better look at using local newspapers in that case.

A way of building the brand image is by carefully selecting the equipments provided to the franchisees. Eg: If you provide a bag, make sure it has a locally suited prominent logo which gives a sense of it being a dependable brand. All the content that you share …like notepads, equipments should have the logo on it.It gives a sense of prestige.

What if it is mismanaged?

Off course, there is a danger of people misusing the branded equipments. You have to ensure that you have a proper monitoring mechanism in place which can identify such activities and immediately recover the branded equipments from them.

On the contrary, imagine a situation where your franchisee owner is not given branded items and they ARE recognised as the service delivery points associated with you. If you do find out after some time that this franchisee owner is not performing as per your standards, how do you let people know that s/he is not your franchisee anymore? You can’t go about running around in the remote rural villages house to house telling people that s/he is no longer your franchisee owner! You do a simpler thing, you take away all the branded material from the person. Off course, you have to do it tactfully or else you can get into trouble. This gives a direct indication to the people that this person no longer possesses the embellishments!  Legal contracts, fear of big brands have less chances of working in rural areas. It is the relationship with the decision makers of the local communities like panchayat pradhans, school teachers and community elders etc that can help. This is also a route suggested by Mr.Sivakumar for generating interest amongst the people in setting up a franchisee in their area. This means that a lot of effort has to be put in by the franchisor in building relationship with such people. Long term success would depend on these relationships.

Going back to ROI, the local wage rate will be a very important factor in figuring out if your franchise would be an attractive option. Get real, your franchisee may not be a hotcake in all rural areas. Do NOT try to force it where it isn’t. Make it work in areas where it has better prospects. You have to figure out how many franchisees you need in a particular geography to justify a person of your own who can be the co-ordinator overseeing the operations of the franchisees. Once the number is figured out, focus in those areas.

How do you ensure quality of services?

To replicate the owned model through independent franchisee owners while ensuring that the processes are strictly followed and the quality specifications of service/product are met, one can follow a district or statebased approach where at the district or state level the franchisor can have a representative who makes sure that the processes are adhered to and also supports the franchisees, controls the processes and implements changes.

More to come…

2 thoughts on “Franchising in rural areas- 2

  1. Excellent inside view on franchising. Would request you to write on below points as well….

    1) How can we differentially treat the Performing & Non Performing franchises? Here Non Performing means the one who is delivering business at slower rate, but can be continued as franchise yet……..

    2) How can we prevent the Leakages from the competition? Once we make a franchise and give him all supports, it become a visible entity in market, and competitors (offering similar products or services) poaching effort starts. It is not feasible every time to close the franchise even knowing that the person is taking competitors’ products because of the local reputation of the franchise…..

    3) I think brand building is continuous process….. it should not be restricted to one or two mediums….. it should be spread as many as innovative ways possible for maximum reach…. and obviously in a cost effective way…..would like to hear about some new field level initiative to reach target consumers……. and most importantly how much cost we can share from franchise for that, to make him more involve and committed in the process…….

    1. Good questions Sitendu. I will TRY to answer your queries. I would not take them up in the exact order but would attempt in the order I think I have an answer.

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