IT Business Franchise - What Is It?

IT Business Franchise - What Is It?

An IT franchise will allow you to organize your own business with a small investment. This business has an unlimited target audience. The advantages are high profitability, fast payback and reduced risks.

Since the Internet and information software provide unlimited possibilities in different spheres, more and more attention is paid to IT-franchising. This direction of business began to develop comparatively recently, but it is quickly becoming popular. Internet franchises allow:

  • Open a store online.
  • To organize a web-design studio.
  • To develop mobile applications and services.
  • Provide software to users.
  • Open stores and shopping centers to sell office equipment and components.

Owners of famous brands in the IT-sector are interested in expanding sales and entering into franchise agreements. Large firms today seek to attract young, energetic entrepreneurs, provide assistance and support to partners. Such cooperation takes place on terms beneficial to both parties.

What is an IT-franchise?

The term "franchise" implies the right to open one's own business, using the trade mark of a large company. For this, the entrepreneur or firm pays the brand owner. The latter provides the necessary information, ideas or products.

The objects of sale are:

  • trademark, logo, trademarks;
  • information technologies;
  • computer software;
  • mobile applications;
  • online services;
  • Internet portals;
  • other intellectual property;
  • business-to-business (B2B) services.

The company that grants the right to use its logo, ideas, and products is called a franchisor. The entrepreneur or firm that buys this right is the franchisee. The very system of selling and promoting the brand is franchising.

The right to use the name and technology is granted on a fee basis. The franchisor has already set up a business mechanism and offers partners a ready-made scheme.

Types of franchises

  1. Standard or classic - the franchisor charges an initial fee and monthly payments. At the same time he controls the state of affairs and, if necessary, provides information support.
  2. Free - the franchisee gets as much independence as possible.
  3. Silver or turnkey business - the brand owner creates and develops a subsidiary, then gives it to the franchisee and receives a percentage of profits.
  4. Golden or master franchise - the company buys a monopoly on the right to operate in the region of residence and independently develops a strategy.
  5. Corporate - the owner of the brand dictates the terms and controls the process at all stages.

Online services franchise is suitable for novice entrepreneurs. The financial scheme of such programs reduces the risks when investing funds. The franchisor's trading algorithms have managed to prove their effectiveness in practice by the time of the agreement.

How IT franchises help to solve problems?

Online business is developing more and more rapidly. A few years ago to open your own business did not require large investments. Now the situation in this sphere has changed. Creating a news portal can require millions of dollars of investment. This problem can be solved with the help of it-franchising.

Entrepreneurship in the field of information technology is characterized by a wide target audience. At the same time, there is the highest competition here. Correctly chosen internet-franchises can cope with it.

Not every business project develops well and works for a long time. Many entrepreneurs who started their own business from scratch go bankrupt within 1-3 years. Franchisees stay on the market longer.

Benefits of an IT franchise

  1. High profitability. Such projects bring good profits to both parties.
  2. Ease of doing business. It is possible to develop the project entirely online.
  3. Possibility to save on the rent or purchase of an office. In addition, the entrepreneur does not have to hire a large staff, train them and pay them.
  4. The initial investment in these cases is less than in the development of other types of business.
  5. The scale of online sales is not limited, there is a chance to attract a large number of users.
  6. Extensive advertising opportunities on the web and other media.
  7. The entrepreneur uses a brand or trademark that has a good reputation on the market.
  8. The speed of business development in a franchise is much faster than from scratch.
  9. Large franchisors provide training and information and legal assistance to partners.
  10. Low risk. The owner of the brand is directly interested in supporting the aspiring entrepreneur.

Disadvantages of an IT franchise

  1. The franchisee's activities are limited by regulations and the terms of the agreement. The brand owner controls the business and the financial situation. In this case, there is much less room for maneuvering.
  2. High cost of some products. This is especially true for the purchase of the exclusive right to operate in the region.
  3. The need for special knowledge in the field of information technology.

Dozens of new offers appear every year. Franchising allows you to enter the IT business even for beginners. The brand owner provides the technical side, and the partner looks for customers.