Many new business ventures are looking to make a name for themselves on the market and they often need to partner with other brands, either by licensing their names out or through some other means. There are plenty of ways businesses can combine their ventures with existing brands and make a profit. Let’s find out how.
Franchising is a term that has been used for decades and it applies to more than just the food industry. Many of you likely reading this article can think of at least one franchise company, but what does it mean? A franchise is essentially an agreement between an individual or company with a unique concept and another business (usually larger) that agrees to add their brand name to said concept in exchange for some form of payment. You can learn more about different franchise opportunities from the team at www.franchise.com. It’s important to note that while there is no official standard for franchising nomenclature, any business operating under such agreements will always be defined as a franchise.
Many tech companies have taken to franchising not only because it helps them build up revenue and clientele faster than if they did everything on their own, but also because it acts as a form of advertisement for their brand names. This creates more chances to make money off of licensing deals and is one of the most common ways tech companies can get involved with an existing franchise company.
Licensing Out Your Name
In addition to franchising, tech companies can license out their names in much the same way. Licensing out your name is one of the simplest ways a tech company can get involved with an existing brand without going through the process of franchising. It’s also somewhat easier to do when you’re starting up a business because you don’t have to worry about investing too much money into a franchise that might not pay off in the end.
Licensing out your name is often a less permanent option for tech companies because it allows them to choose from several different possibilities and pick one that fits best with what they have in mind. Tech companies should always keep in mind however that because this isn’t as long-term an agreement as franchising, there is a higher chance of loss and an increased need for negotiation.
Working With Existing Franchise Brands: A Pros and Cons List
As discussed earlier, tech companies often look to combine their business ventures with franchise brands because it helps them build up revenue and clientele faster than if they did everything on their own. If executed correctly, such agreements can benefit both the tech company and the existing brand (and even create more success for both). However, all parties involved must know what they’re getting into when they enter into such an agreement. This way everyone stands to gain; even if things don’t go as planned! Here are some pros and cons associated with working with an existing franchise company:
- Revenue – Having a larger company backing you up is often enough to get new or struggling businesses off their feet and into steady profit territory.
- Brand Name – Partnering with an established franchise brand can help tech companies gain some recognition and notoriety by simply licensing their name and logo out.
- Advertising – Just like franchising, partnering your business with an existing franchise brand can create free advertising for both parties involved. For instance, if Tech Company A licenses out its name to Existing Franchise Brand B, those who see Existing Franchise Brand B’s advertisement (TV commercials, etc.) will also be reminded of Tech Company A even if they don’t realize it. This creates more chances to make money off of licensing deals.
- Time – It takes time for franchise brands to put together or advertise their products and many tech companies don’t have the time to spare.
- Space – Franchise brands are used to operating out of larger spaces, while tech companies typically work out of smaller ones. This could lead to problems if both parties try using the same space at once.
- Money – As with any business venture, money is often an integral part of success. The tech company will likely have less bargaining power when it comes to negotiating financial matters because they are usually initially relying on the other party’s financial status, which means that ultimately there may be more expenses than profits for either party involved.
There are several reasons why tech companies should think about combining their ventures with existing franchise brands. However, as is the case with anything in business, such deals should only be executed after all possibilities have been considered and both parties are aware of what they’re getting into. This way everyone stands to gain – even if things don’t turn out as planned!