Reasons of the Exponential Increase in Franchising Business - Research Paper Example

? Franchising – Just Dogs EXECUTIVE SUMMARY The franchising business is one of those business domains that have seen an exponential increase in the last 2 decades. Every industry in the world has some of its players operating under franchised operations. This exponential growth is a result of various benefits offered by franchising strategy such as success rates, security in operations, immediate boosts in sales due to brand power and increased credibility. These too form the reason for my choosing franchising as a business initiative strategy. In the following report I have analysed the feasibility of marketing operations of opening a franchise of “Just Dogs” Gourmets Company in Washington, USA. I have analysed that the strategy of franchising will work if only the company works affectively on its promotion schemes and position strategies. The franchise will have to carry the same value proposition as laid down by the parent company and streamline its operations with it. In this way, the franchise will be able to gain innumerable benefits of the franchising strategy. SITUATION ANALYSIS Just Dogs! Gourmet is a dog food manufacturing company that specializes in all natural Dog treats and sells them through Bakeries throughout the United States. Handmade Dog delights and gourmet treats are the specialities of Just Dogs! Gourmet Company. As far as the franchising strategy and success of the company is concerned, it is counted among the Companies with the fastest growing franchises throughout the world. The company focus on providing the best Dog treats to the customers to ensure that every Dog in the target market is satisfied. Dog accessories are also some counted as the major products of the company. The company provides a lot of incentive for the franchisees in order to extend its business on the geographical landscape (Help, 2012). IT is also worth considering that the US pet food industry is growing at a very fast pace and only in 2009; the US people spent 12.6 billion dollars on the pets industry. This means that from an investors point of view, investing in a Dog food company for franchising is a very feasible job. Hence we have chosen the “Just Dogs!” Gourmet Company to analyse the prospects of franchising (Barnes, 2005). REASONS FOR CHOOSING JUST DOGS FRANCHISE OFFER: There are, in all 100000 dog food manufacturers in the United States and out of these only few offer appropriate franchising opportunities for business initiatives. Of these few people, we have chosen Just Dogs! Gourmet Company, because of the following reasons: The total investment that would be needed in establishing franchises $750000 to $150000. This counts a lot if the long term investment is considered. The franchising fee is only $25000 and the ongoing Royalty fee is 4%. The terms of Franchise agreement is 10 years which is enough to show the feasibility of a long term business solution considering the reputation of the company in the market (United States, 2011). Other than that, the company provides regular training facilities to the franchisee staff at its head quarters as well at the franchise vicinity. The company also offers a range of services to the employees at the franchise through toll free phones, Newsletters, meetings, guiding missions. The company also offers a strong marketing support to the franchises to ensure sales to full potential. Considering all these facts in mind we can easily conclude that the franchising offer of the company is a great business initiative opportunity. MARKET ANALYSIS We have chosen to open a franchise of Just Dogs! Gourmet in Washington, primarily because Washington seems to be a promising market for the business. According to reports, the total population of Washington is 6830038 while the number of housing units in the city is 2882677. According to reports, 65% of the households own dogs. This shows that the 1873740 houses can be the complete target market in the city. This figure is obviously optimistic and shows great prospects to the business. The competition in the market is reasonably high as there are 5280 food makers in the state and penetrating into such a market will not be free from risks. The company has to realize that in spite of tough competition that it will face, the company can still be in a competitive position as the market is not saturated as yet and has a very large size (Media, 2012). CUSTOMERS ANALYSIS: The market of Washington is heavily dominated by the baby boomers who live alone with their dogs and utilize all their savings for feeding their beloved dogs. The company has a lot of opportunity if it attracts this segment of the Population. These customers can offer adequate margins to the company per unit. One research shows that about 27% of the population of Washington that buys Dog food are divorced individuals who adopt Dogs as pets only to get the aid of existence of a living member. These can also become part of the customer base of the company. The company will have to work on the promotional campaigns in order to gain share in this market as there are already many companies working in the industry. However, by using our franchise option, we will be able to use the well known brand name of Just Dogs to capture the market share using similar operational tactics. COMPETITORS’ ANALYSIS: As already mentioned, there are almost 5820 Dog food producers operating in the market of Washington. The competition in the industry is high and the company will have to promote its brand to easily gain competitive edge over the competitors. The franchise option will also allow us to produce differentiated products that would distinguish us from the competitors. However, we will make sure that the quality and brand proposition of the company remains intact throughout the life of the franchise. Online store offering Dog foods are also playing in the market and the company will have to use additional strategies to give competition to these online stores . OPERATIONS STRATEGY The franchise will have to streamline its operations to those of the parent company and for this reason it will work in collaboration with the parent company to train its employees. Since the major focus is on food, the composition of the ingredients is very important. Also the franchise will have to carry the same value proposition for the brand as set by the company. It will have to be careful not to take any decision without the involvement of the parent authorities because any failure will affect the image of the entire brand. CONCLUSION: The franchising strategy will prove to be an important aid in furthering the strategic objectives of Just Dogs! Gourmet. The strategy will not only prove to be beneficial for the franchisee but also for the franchisee. The franchisee will be able to reap the benefits of this strategy in the form of rapid sales, low input costs, credible brand power and operational security if it religiously follows the guidelines mentioned in the report (Siegal, 1983). REFERENCESTop of Form Top of Form Bottom of Form Top of Form Barnes, N. G., & University of Massachusetts Dartmouth. (2005). A market analysis of the US pet food industry to determine new opportunities for the cranberry industry. North Dartmouth, Mass: University of Massachusetts Dartmouth, Center for Business Research. Help, F. (2012, feb 15). just-dogs-gourmet. Retrieved from franchisehelp: http://www.franchisehelp.com/franchises/just-dogs-gourmet Media, E. (2012, April 15). Just Dogs! Gourmet. Retrieved from: http://www.entrepreneur.com/franchises/justdogsgourmet/313988-0.html Bottom of Form Bottom of Form Siegel, W. L. (1983). Franchising. New York: Wiley. United States. (2011). Census 2010: Final report to Congress. Washington, D.C: U.S. Dept. of Commerce, Office of Inspector General, Office of Audit and Evaluation. Read More

 

Read More