Franchise Owned Company Opreted -FOCO Model
FOCO model in general allows an investor to put money in a venture and then follow up with the returns on investment in terms of Minimum Guarantee.
Brands have to ensure a business sum , so that they can give the minimum guarantee to the investor.
Brands who are confident on their operations and do not intend to put their capital to raise a store, offers FOCO model.
Managing Director of Sujita apparels OPC Pvt. Ltd says, “In COCO model, responsibility of the investment, expansion and optimum utilization of resources is on the company while, FOCO is a good example of value for money. In addition, FOCO offers minimal risk for both franchisor and franchisee. Franchisor has lot to do in FOCO model as they can get the things done as per their norms taking the franchisee along.”
“After one year or so, franchisees try to get hold of the things without adhering to the company’s policies in the specified manner, leading to drop in the brand value. In the wake of that, Return on Investment (RoI) that is usually committed to three years goes to five years. On the other hand, FOCO is a partnership model and company has the liability to give RoI on time either it’s in loss or profit. Our outlets running on FOFO model is now planning to switch over to FOCO looking at its promising returns.”
“FOCO offers better value for both the franchisee and consumer with better buying power, consolidation etc. Moreover, franchisee can focus their energies on the promotion and sales, leaving the operation and logistics to the brand company. On one hand, aspiring entrepreneurs having large amount of capital in the pocket to invest are likely to take in FOFO model as the store runs independently merely by adhering to the brand’s guidelines. Whereas, FOCO model permits the enterpriser to run store's operations without franchisee's intrusion and gets revenue share self-reliantly.”
Benefits of FOCO Model
- Franchise owned company operated system.
- Get maximum ROI (Rate of interest) of your investment.
- Secured investment.
- Assured return.
- Risk free opportunities.
- Free from Buying, Selling, Operations, Logistics, Dead stock, Salary. Etc.
- Work under the company professionals guidelines.
- One time investment and get per month assured return.
- FOCO model can turn out to be right pick for the first time entrepreneurs and franchisees as it guarantees minimal risk as franchisee just invest in the brand and rest the company takes care of brand’s overall operations.