What is a founder?
Definition: A founder or company founder is an individual who takes up a professional activity on an economically and legally independent, commercial or freelance basis. In the case of self-employment as a freelancer or sole proprietor, founders are also simply called company founders. Conceptually, company founders are often equated with company founders who set up a corporation or partnership.
The founders in Germany
Due to their security concerns, many employees equate a start-up project with “jumping into the deep end”. In Germany, there is a pronounced reluctance to become self-employed, which can be proven with figures. Founders from a salaried position often hear statements from their colleagues such as: “Start your own business? I wouldn’t have the courage to do that. But founders do not necessarily have to invest in an uncertain future.
In Germany, the rate of start-ups among the workforce is comparatively low (according to studies in 2017 and 2018, it is around 5%). Nevertheless, founders are regarded as social hopefuls, as many of them create jobs by founding their own companies.
The franchise advantages for founders
As a franchisee, the founder takes over an established business model. The range of products, business processes and procedures are tried and tested. He avoids founder mistakes and starts with the best chances of success.
As a rule, the franchise founder starts under a brand that is already known in general or in the industry. He does not have to take care of brand building.
A unique selling proposition (USP) is one of the decisive success factors in franchising. Usually, the USP has to do with the highly specialized products and services sold by the franchise partners.
The company philosophy is developed by the franchisor and adopted and brought to life by its partners. In this way, the guiding principle of the company can be communicated, which should contribute to the loyalty of customers and employees.
A professionally set up franchise system ensures realistic goals in terms of market share, margins, profits, revenues and ROI. Strategies for achieving goals are often developed with the help of franchise experts.
The franchisor supports its partners in the preparation of a credible business plan as well as sound financial planning so that they can accurately estimate their investment needs and convince financiers.
A sophisticated communication concept to attract new customers, retain existing customers, build brand image, increase brand awareness, and much more.
These and other advantages speak for a business start-up in franchising. Franchisors support their partners in the set-up process as well as in the ongoing operation. In addition, franchisees do not have to completely “invent” their business. They can take over many things from their system headquarters or draw on the experience of other network partners). The founder benefits from the division of labor in the franchise system. He can focus on his core business: Many administrative tasks such as purchasing, supra-regional marketing, training/education or commercial support are taken over as services of the system headquarters.
The founder generally receives comprehensive training – both technical and commercial, as well as in business management issues. The franchise founder not only benefits from the practical knowledge of his franchisor: In most networks, there is a regular exchange of experience with the other franchisees, e.g. in partner conferences.
Franchising is often referred to as an “entrepreneurial school“. Many founders take the path of franchising, which is considered to be safer, instead of setting up their own business, which is considered to be riskier, when they first start out on their own. It remains limited to a sales area defined in the franchise agreement. However, franchisees also have the opportunity to expand – e.g. in the form of master franchising.
– No implementation of own business idea; “subordination” to existing brand and business concept, possibly no full “self-realization”.
– Limited entrepreneurial freedom due to franchisor’s authority to issue instructions.
– A one-time, often five-digit system entry fee must be paid.
Monthly franchise fees are usually payable, sometimes also advertising fees. Franchise fees are sometimes fixed, but most are revenue- or profit-based. For his fees, the franchisee receives, among other things, the rights to use the brand and business concept, the transfer of know-how, and the services of the system headquarters, see Obligations of the franchisor. But he is also contractually obligated to implement these as 1:1 as possible, which severely restricts his entrepreneurial freedom (see Duties of the franchisee).
Business Idea for a virtual office in paphos.