Dealerships vs. Franchises

November 27, 2019

Franchise the name is enough to provide you the idea and line of business in which they are operating. The franchise model is way common and comes with the set standards and rule which you cannot break at any cost. There are other people too who work as a dealer but you are not sure which one is better and will generate profit in the long run.

What is the Franchise?

The franchise is considered a business model that has all the things provided by the brand who is selling franchisee to other people. It comes with the standard rules and regulation and also you cannot make modifications in their business model according to your choice. They have to pay royalty fees to the brand for acquiring the franchise.

The franchise model provides us a sum of benefit as the brand is well-known among the consumers. Their positive experience with the brand increases the chances of having more and more business. You can only sell one specific brand or you cannot indulge in selling other brands and if you do so they can straight away terminate business with you. In order to acquire the franchise, the person has to go through various contracts and agreements.

What are Dealerships?

Dealerships act as an agreement that allows you to commence the business and sell a particular product or service. The dealership does not come with proper business design and agreement. They have flexible terms as they are not bounded by any rules and regulations, unlike franchise models.

Dealerships are open to run their business by having each and every brand with them which leads to giving tough competition to competitors. There is no amount of fees involved in the dealerships.

What are the advantages of the Franchise?

Franchise works the same in every part of the world and it provides you a series of benefits.
● The customer has proper knowledge of the brand which has developed a
trust in their mind about the reliability of the product.
● No wastage of money on advertisement and on other promotional activities.
● They will provide proper support in the maintenance of the franchise and
provide the salesperson’s training.

What are the advantages of the Dealerships?

dealership vs Franchise

More flexible business model than the franchise.
● No involvement of any other person and are not bound by the rules and
regulations.
● Dealership agreement in order to protect the brand name.