What are the Franchise Models? | FOFO | FOCO | FICO | COCO | COFO - @franchisediscovery

In this video, you’re going to learn what are the franchise models in franchise business | FOFO | FOCO | FICO | COCO | COFO


Video description
So, Franchise owned and franchise-operated is the FOFO model Now let's discuss what the FOFO model is. Franchise-owned franchise-operated. This means you are the owner of the franchise and you are going to operate. Now we shall see how the brand will support the franchise-owned and franchise-operated model. Firstly, the set-up cost or the investment, the business operation customer acquisition has to be taken care of by the franchisee. You also have to check on and take care of the profit, loss, or marketing tactics in the local area. But how does the brand support here? The brand will provide a logo, and value, along with business ideas and modules. The brand supports central marketing activities, logistics, products, hiring employees, and training modules, so that the product you will deal with shall always maintain uniformity. So, these are the basic steps for how the brand supports you (franchisee). Next, comes, what will the franchisee pay to the brand? So here you will pay a royalty on monthly basis to the brand for the continuous support provided from time to time, from every week to every month to every year to even every minute anytime you face challenges. Royalty is paid monthly basis that varies from 5%-10%. This also varies from brand to brand depending on how big it is.

Franchise owned Company operated ( FOCO Model), means in a franchise business set up you will invest and you will be the owner whereas the company will operate the business which means here your responsibility is totally halved. Here you are one kind of investor and the company will operate the business. So now that the company is operating what are the company’s responsibilities? The company will look into all operations eg: product quality maintenance, hiring employees, training, logistics, customer acquisition, and central marketing tactics including local marketing tactics. Now, what do you pay to the company? A certain amount of percentage is decided that is paid to the company for carrying out the business operations, anything between 6-12%.and the rest of the amount will be with the franchise. Here a second model exists where all processes are the same but company runs the entire business and the company says that it will pay an x percentage(6-12%) of the amount to the franchise and the rest will be with the company.

Third is FICO model ( Franchise invested Company operated)
In this model, total investment is done by franchise and brand runs the outlet. There is a minimum return commitment from the brand. So in India the opportunities for FICO model is very less because here chances of loss is more. According to research only 1 to 2% of the brands deal with FICO model.

Fourth model is the COCO model, company owned company operated foremostly franchise is not involved in the COCO model. Here company makes its own brand and expands itself. It has its own employees' third party is involved. Basically it has no relation with franchises.

The fifth option is the COFO model, company-owned franchise operated. In India there is less than 1% of companies in this model because when a company invests and expands its outlet, they do want to involve any other franchise as the company has invested whole solely and runs the outlet on its own, also it has the best experience. Incase you are working in a franchise model there are two best-preferred models- FOFO and FOCO model. The rest other models are for understanding the franchise model concepts in India.
Thank You.

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