Why franchising works economically

Technician

When looking to buy a franchise, you may be wondering how the system functions as a whole. It’s good to understand, as you can build your business strategy not just on the franchise model, but with an understanding of how it functions normally. You’re probably thinking that there’s more to franchising than paying some fees upfront, and you’d be right. Franchising takes two very important aspects of business – namely, the economies of scale and branding – and combines them in a way that benefits the franchisee. The Moran Family of Brands adds a third, investment diversity, by having multiple brands that cover different verticals in the automotive industry.

Designed to scalebr> Economies of scale are how many big businesses function efficiently. Basically, there are a set of fixed costs that go into the production of any given unit, such as planning, design and layout. While the total cost of producing multiple units of a certain product increases, the cost per unit declines because you can spread these fixed costs over more units. At a certain point, you can maximize the savings per unit based on how much is being sold. This process spreads to other parts of the supply chain, including retail and distribution.

When it comes to franchising, you basically have the purchasing power of a big business company that can buy to scale. The business model often dictates which companies you’re allowed to purchase goods from, but that is because the franchisor negotiated with them to get the lowest price possible. As a result, you’re able to purchase something at a far lower rate than you would if you had to buy it directly from the supplier. In addition, you don’t need to negotiate for savings, since they’re engrained thanks to the company’s efforts. That is the power of economies of scale put to uses for your benefit. Moran does this for auto parts that are used by Milex Complete Auto Care and Mr. Transmission technicians.

The power of the brandbr> When it comes to recognition in the market, it can be rather difficult to build a reputation for yourself as a solid business for customers both near and far to visit when necessary. Part of the reason marketing exists is to you’re able to build awareness. However, with so many different choices for doing business, especially in auto repair, and with so much content and advertising over several different channels, it’s hard to get your foot in the door.

As a consequence, having a brand people recognize can be very useful. Similar to the aforementioned economies of scale, a brand is easily recognizable to many people in a given market. Through a combination of television ads, print media, social media outreach and other channels, a national brand is far better known than a local business. As a franchisee, you can leverage that brand to direct people to your business. While you still need to perform marketing, the awareness portion of the process has already been completed to a certain extent.

Safety in numbersbr> Moran takes things a step further by having multiple brands under its belt, and franchisees can take advantage of that as well. When you manage brands that are based in multiple verticals, you have a higher amount of potential customers to work with. While not everyone will want to visit Milex for general repairs, they may have a transmission or clutch problem that they want addressed at a Mr. Transmission, and vice versa. By running two brands at once, you yourself at taking advantage of economies of scale by sharing resources, thus maximizing gains and minimizing losses.

To learn more about the power of franchising, visit the Moran Family of Brands website today!

Dedication

They consistently follow our company’s vision and mission, and fulfill their responsibilities in that role.

Respect

People who are polite and well-mannered toward their customers and employees, who go out of their way to make sure others are being treated well.

Integrity

They uphold the highest standards in ethics and authority, ensuring that the customer’s interests come before their own.

Vision

These individuals always look to the future, seeking out ways to improve both themselves and the franchise they run.

Enthusiasm

They enjoy the work they do and the mission and vision of our company.

Get in Touch with Us!

Interested in franchise? Let’s get the conversation started. Let Moran Family of Brands know how they can help you.

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