What is a virtual franchise business? How does it work?
Today I’ll discuss one of the best, yet least known business models in the market today.
In this article, I’ll outline what virtual franchising is (and what it is NOT), how it works, and if it’s the right business model for you.
What is a Virtual Franchise Business?
To answer this question, we’ve got to first look at what franchising is.
It’s important to understand the franchise model and how it works before we can move to how a virtual franchise works.
How Does Franchising Work?
Franchising is basically the concept of scaling what is already working by allowing others to use your model to market your product or services.
Just about any business can utilize the franchising model such as beauty salons, cleaning companies, moving companies, gyms, etc.
Usually though, when people say the word franchise, most people think of a restaurant or eatery.
That’s because some of the most popular restaurants are franchises, such as McDonalds.
The Good, the Bad, and the Ugly of the Franchise Model
There are good and bad aspects to running a franchise.
For the franchise parent company, the good part is it allows them to:
1) Grow quickly
2) Subsidize opening more locations
3) Make more profit
4) Help others succeed
The bad is:
1) They have a potential headache if they don’t vet their franchises well
2) More liability
3) Less control
As a person opening a franchise, there are some good and bad as well.
The Good:
1) Hopefully, the system and concept is profitable.
2) Help navigating opening a business so you don’t make expensive mistakes
3) Less risk because it’s (hypothetically) a good business model
4) Inventory, product, supply chains, etc. are already in place
The Bad:
1) Often, a franchise is very expensive to start
2) Much of the financial risk of opening a new market falls on you rather than the parent company.
3) You have to rely on the parent company and hope their systems are as good as they said when they were selling you on their opportunity
4) Typically, there are ongoing franchise fees and sharing of your revenue
Interesting History of Franchising
One of the interesting things about franchising that most people don’t know is that it wasn’t always an acceptable option.
In the beginning, it wasn’t widely accepted.
In fact, there are still many out there who dislike the model.
To be honest, many of those who hate the model are those who were burned by it.
Maybe they invested their life savings or mortgaged their home to buy into a business… only to find out it wasn’t all sunshine and rainbows.
What you’ve got to understand is that franchises make their money by opening more successful franchises.
The problem is, they also mitigate their risk by passing on the opening of the franchise to the person who puts up the franchise fees.
So if one store or branch closes, it doesn’t hurt them too much.
And there are some irreparable companies out there.
Depending on the company, they may make good money just by selling franchises and may have very little interest in helping the business succeed.
That doesn’t mean they want them to fail, they just may not care either way.
The other big problem with this model is the appearance of success.
Maybe a franchise opens ten locations in an area.
That makes them look like a good franchise but what if the franchise owners are barely making ends meet, barely being profitable, and living month to month?
It still looks like a successful franchise to others looking for something and it allows the company to say we have over “x” number of locations.
Overall, there is good and bad to traditional franchising but it can be a very risky endeavor.
One way to mitigate your own risk is to buy into one that is very established.
The problem is, the more well known and established they are… the more it’s going to cost to get started, which means more risk to you.
How does a Virtual Franchise Business Work?
A virtual franchise business model basically keeps the good aspects of franchising while at the same time removes the bad aspects.
So let’s look at how it works and what to expect.
A Virtual Franchise Parent Company
In a virtual franchise, there’s still a parent company.
This company produces product, ships product, sets up online systems for the franchise owner, and manages payroll and commissions.
They take care of all forms of research and development, legal issues, and the systems to support the business owners.
A Virtual Franchise Business has No Physical Location
In a virtual franchise business, there is no physical location.
Owners operate out of the comfort of their home or office.
Hence the term… virtual franchise.
This model is also referred to as direct sales, network marketing, tiered affiliate sales, multi-level marketing (mlm), and relational marketing.
You may have heard some of those terms before and if you have, they may carry a negative connotation.
But before you click away or put on your blinders, keep in mind that the model has changed dramatically and improved significantly since it’s inception.
It’s probably not what you’re thinking in your head.
Public perception is changing and the industry is more mainstream than ever.
This is likely because of all the improvements and the thousands of professionals who are choosing this business model of the traditional business model because it makes the most sense.
Social acceptance takes time.
Let’s look at some of the positives before you decide whether it’s a fit for you.
No More Bugging Friends and Family
With the entire world online, the virtual franchise business model can finally be built on a shoestring budget using traditional marketing tactics.
That means that while it’s still possible and okay to build a business using home parties and prospecting friends and family… you don’t have to.
In fact, you can choose to build a virtual franchise business without talking to any friends and family.
Very few of my friends even know what we do as a side hustle.
I only bring it up when the conversation naturally goes that way (not because I tried to lead it that way).
If somebody tells me they are looking for something to do to create extra cash flow, I sometimes bring it up.
If things get weird, I drop it.
The truth his, anybody can build a profitable business now without ever bugging their friends and family.
There can Actually be a System for Success
Before the internet, top leaders went from town to town, home to home, meeting to meeting telling people that if they implement their system… they will be successful.
The problem was, their system was usually a flip chart that came with the recommendation to “talk to more people”.
If you’re not good at sales or not charismatic (as these leaders usually are), talking to more people just means more failure.
But now, everything can be created, shared, and scaled online.
For example, as of this writing, we currently set up a sales landing page with people who join our team.
That means, when they start, they get a link that they can direct people to (by texting, using social media, or using online marketing efforts).
That link allows people to see how it works and also order product or become a virtual franchise owner themselves.
It is an actual system.
And just like the systems set up in physical franchises like McDonald’s, it can be updated and improved.
For example, if we find a video that converts better online we can simply swap the video out on all the sales pages.
That means if a person isn’t good at presenting, it’s okay.
All they have to do is send people to a carbon copy of the same sales page that is working for everybody else.
A Virtual Franchise Business Offers High Profits & Few Headaches
The best thing about the virtual franchise business model is that the parent company handles everything.
Customer complaints, returns, shipping, product development, etc.
In addition, the cost and expense of doing business never grows for the small business owner.
It does for the parent company, but not the owner/operator.
In traditional business, if your business grows, your overhead costs grow.
You have more shipping costs, more payroll, more inventory, etc…. more everything!
In the virtual franchise business model, you simply have more customers and more profitability.
That’s why so many educated professional are moving to this model.
Once you hit profitability, it’s all gravy from there… no matter how big the gravy train gets!
Passive Income
Since the parent company handles all the technical headaches, building a virtual franchise business means you will have the time to enjoy your new profits.
Rather than working more as your business grows, you can actually work less as you launch more and more virtual franchise business owners.
If this is your first time to this site, we pride ourselves on building this business the right way.
We’d like to invite you check out how it works and seriously consider whether starting a business like this would be the right fit for you.
You can start for less than you think and the income profit potential rivals that of any brick and mortar business with way less headaches.
Lastly, but more importantly than all of this, if you’d like to start a relationship with Jesus Christ, let us show you how.
Live Boldly & God Bless,
Jason & Daniele
