If you’ve landed on this article page, you’re probably searching for a
good business idea—an idea that’s light on the pocket but heavy on
returns, promising both a fulfilling journey and potential profit.
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Franchising as a business arrangement whereby the franchisor
grants the franchise operator (the “franchisee”) the right to
distribute certain products or services in a particular way, at
a particular location and for specified periods of time.
In return, the franchisee pays the franchisor fees and
royalties.The
market demand for the franchise industry grows by as much as 30
percent annually in the global markets.
A franchise is a business whereby the owner licenses its
operations along with its products, branding, and knowledge in
exchange for a franchise fee. In Nigeria, there are several
local and international franchises. Mr. Biggs, Chicken republic,
and NNPC are good examples of local franchises in Nigeria. KFC,
Domino’s pizza, Cold Stone, Shoprite, Krispy Kreme, and SPAR are
all examples of international Franchises in Nigeria.
The Nigerian Franchising sector is considered to be in its
infancy, particularly when compared to the likes of South Africa
where the sector accounts for 12.5% of their GDP. Currently, the
dominance of international franchises is visibly evident in
Nigeria as manifested in the activities of Shoprite and Spar in
retail and Domino’s, and Burger King in fast food.
High population in the country creates two advantages for
establishing a franchise, large consumer market and much
workforce..
With a population of about 200 million, Nigeria is the most
populous country in Africa and has the potential to become the
gateway for franchise development in Africa
To start a franchise in Nigeria, one has to also register the
franchise agreement with the National Office for Technology
Acquisition and Promotion (NOTAP). By the provisions of the
NOTAP Act[i],
all agreements for the transfer of technology between a foreign
transferor and a Nigerian transferee must be registered with
NOTAP.
It is therefore important for anyone aiming to start a franchise
to take a critical look at what it entails before delving into
it. For a franchise business to be successful, it requires a
high degree of co-operation by all the parties involved, the
failure of which can be disastrous not only for the franchisor
but also for the franchisee.
Thus, for a franchise to succeed, it must be
well-structured, well-managed and most importantly the legal
roadmap must be well-defined.
There are many structures to consider when starting up a
franchise. A franchise owner may operate as a sole
proprietorship, a partnership or a limited liability company. An
investor in this field should not take these choices lightly as
each of the structures comes with its own peculiar advantages
and down sides
In addition to a well-known brand name, buying a franchise
offers many other advantages that aren’t available to the
entrepreneur starting a business from scratch. Perhaps the most
significant is that with a franchise you get a proven system of
operation and training in how to use it. New franchisees can
avoid a lot of the mistakes startup entrepreneurs typically make
because the franchisor has already perfected daily operations
through trial and error.
Another upside to about Franchising in Nigeria is that you get
mentorship and important training which helps to maintain a
quality standard in your product and services and avoid the
mistake of underserving customers and ultimately ruining your
business.
In Nigeria, the most successful franchise businesses are
transportation, movie, logistics, coffee, petrol stations,
medical health care, educational services, restaurant and
beauty. The franchise market in Nigeria brings an annual revenue
of one hundred billion dollars. There are many foreign, mostly
US, South African and European franchises, though the demand for
international brands is still growing.
High brand equity: The
main advantage of operating as a franchisee is that you get to
use a well-established and recognized brand for your business.
The brand equity of the franchise company can help you increase
your sales and achieve faster growth as compared to starting a
new business from scratch.
Economies of scale:
Another advantage of franchising is that you get to leverage the
economies of scale of the parent franchise company that has been
operating in Nigeria for years. This means that you can save on
costs related to marketing, business operations, and staffing by
leveraging the existing infrastructure of the franchise.
Our Franchise resource
information featured key note presentation, real life studies
and interactive discussions. This is an opportunity to hear from
key industry experts, who will share their expertise and
experience on how to start their own franchise business. Our in
house expert will help you identify viable franchise
opportunities and provide an analysis of which direction the
industry is headed in
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The
average franchise costs depend on the type and size of the
business but on the average they are between $50,000 and
$200,000 to establishFranchise1.jpeg)
