Franchise is a business format used for various business activities. It is a smart model to start and operate successful mature business, able to expand. Manufacturing franchise (MFran) sometimes called product franchise is the application of the franchise expansion model to grant a local franchisee the right to invest in establishing and duplicating a factory of the original producer and sell products using the names, technology, expertise and trade mark of a well-established partner, It is a unique franchise opportunity for both the original manufacturer and the franchisee.
Rewards for Manufacturing Franchisee & Franchisor
The owner instead of using his capital to invest in a branch factory, uses the franchise contract to let the franchisee pay the capital and costs to install, produce and sell in another location or country and pay franchise front fees and percentage of sales. One of the main advantages is risks averting in other countries of different business and social culture. That pave the way for countries to develop a new advanced modern industry an transfer state of the art technology.
Manufacturing Franchise beginnings
Manufacturing franchise started with beverage companies as an expansion model for soft drinks products, they grant the right to local investors in other countries to produce the beverages, the bottles, and do the marketing & distribution. Coca Cola & Pepsi cola in US were the first at that time. Later MFran is used in manufacturing many products like automobiles, automotive, parts and clothing ...etc.
Manufacturing Franchise Growth
Today MFran is growing largely and spreading in Britain, also in India it is adopted for many sectors including pharma. The Middle East is acquainted with franchise for restaurant and beverages, later moved to other sectors. Generally manufacturing franchise is not attended to.
With globalization, modern transformations & the fourth industrial revolution, manufacturing franchise moved to the front, as a highly competitive, innovative, and bright tool of expansion and technology transfer.
The franchise concept for manufacturing although it seems complex, that is not true because industry is a well-organized, well regulated, well specified, and controlled set up. It is perfect to be franchised, that opens golden chances for advanced manufacturers to spread to countries of high financial potential in the Gulf .
SMIs (small & medium industries)
Examples of products manufacturing are many, some of them suits small and medium investment .That includes producing high consumer demand goods like modern air condition ,Ventilators, Pumps, Compressors, processing machines, car parts, Value-add Services targeting electric appliances , and houses products , production of materials needed for local industries supply chain linkages, construction items and fittings, doors, frames, smart phone accessories, textile products, furniture, wood work, food makers, leather manufacturer, recycling.
Significant supporting services is availed by the franchise agreement from franchisor, including training, know-how, Sales and Marketing R&D, all within the support from the franchisor, including management techniques. So, franchise provide all tools of success in a win-win partnership. It is the most suitable for SMEs investing in Low- to Medium technical products.
Investors with suitable available funding sources from banks or other, can opt for advanced manufacturing with more capital cost, but high rewards. The Internet of things, the Artificial intelligence, Big Data, cloud, and modern sensing gadgets created the advanced smart manufacturing machines & systems with Internal linkages and intelligent connections networks jointly performing different complicated tasks & functions, in an optimum harmony. That shorten time, space, processes and use of resource while allowing preventive protective maintenance, high efficiency and & higher quality products. The digital strong controls allow performance with high standards, precession & specifications by tracking every move.
Types of these industries include the following : (new innovations industries , high usage of AI in all production and related procedures, smart material appliances, engineering , high technology industries, airplanes, space related, environment safety, health products, information systems and digital data appliances, 3D and additive technology, mobiles, modern computers and high precession industries, Neo age autonomous robots and super industrial computers, Hyped & hydrogen, solar and self-driving cars . All modern appliances using digital facilities are included. The controls, governance and binding agreements will keep secrets and trademark well
Manufacturing Franchise in USA
In USA there is so many manufacturing franchises in almost all types of industries. Contract manufacturing is widely used, manufacturers accept franchise as another sort of contract manufacturing. Flextronics a big manufacturer spreading around the world, manufacturing game machines, routers, mobiles, and other products through contracting. In USA there is growing demand for MFran because it is linked to modern innovative products, utilizing new advanced technologies. MFran features and advantages include: -
- Having flexible automation that increase productivity
- More use of additive manufacturing
- Reduced cost through flexible and scalable manufacturing franchise
- High tech developments afforded by the original owner
- Easy product customization regarding consumer shift in assessment and valuation of commodities.
- Successful investment in innovation
- High energy use efficiency
- Increase focus on safety and environment effects
Manufacturing franchise for the Industrial Strategy of Abu Dhabi
Industry is not in general enticing for many local investors. Causes are plain including the apparent complexity of the establishment, installation processes and the operation. Where inputs are various in the establishment phases, that request outsourcing and engagement of technical experts in all steps. Also, choice of technology best sources is vital. Risk factors can only be averted if you have the perfect partner. That is why Franchise business model is the ideal and safe way all through the process of machine selection, installation to product high quality marketing output.
Banks & investment funds usually classify franchise as low risk because of the all reaching support granted by original company which render crucial services and offer continuous open consultations & training. Success of the franchisee is the success of introduction of the brand products in a new market by that adding value to the trademark.
Industrial franchise should be part of Abu Dhabi industrial development strategy of having a modern advanced smart industry. Which is vital for economic diversification and for having a real strong productive competitive economy in a changing world.
Scope consultancy experts advise is to have more significant support for the spread of franchise to all sectors in UAE including MFran. There is imperative need of smart franchise strategy to guide and direct the franchise development in industry & other sectors. Scope is actively participating in making it a reality.
SCOPE MANAGEMENT CONSULTANCY
ABU DHABI, UNITED ARAB EMIRATES