The Influence Of Products, Capital, Profit Potential, And Brand On The Decision To Buy A Franchise Business (a Case Study Of Food Franchise Business At Sun Plaza Medan)

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The Influence of Products, Capital, Profit Potential, and Brand on the Decision to Buy a Franchise Business: A Case Study of Food Franchise Business at Sun Plaza Medan

Introduction

Starting a business can be a daunting task, especially for those who are new to entrepreneurship. However, buying a franchise can be a safer and more structured choice. With the rise of franchise businesses, especially in the culinary field, it is essential to understand what drives individuals to choose this option. This case study aims to reveal the factors that influence the decision to buy a franchise business, focusing on the food franchise business at Sun Plaza Medan.

Background

Sun Plaza Medan is a bustling shopping center in North Sumatra, Indonesia, that has become a hub for various franchise businesses. The research conducted at this location aimed to identify the key factors that encourage entrepreneurs to buy franchises in the culinary field. The study involved 32 franchise owners as respondents and used a purposive random sampling method to collect and analyze data.

Research Methodology

The research methodology used in this study was a purposive random sampling method, which involved selecting a sample of franchise owners based on specific criteria. The data was collected and analyzed using descriptive and statistical methods, including validity tests, reliability, F test, T test, and determination identification (R2). This approach allowed the researchers to identify the significant factors that influence the decision to buy a franchise.

The Factors that Influence the Decision to Buy a Franchise

The results of this study revealed that the four factors studied together have a positive and significant influence on the decision to buy a franchise. These factors are:

*** Products: ** The advantages of the products offered by the franchise are the main considerations. Does the product have great market potential? Are the products innovative and different from competitors? A product with a strong market potential and unique features is more likely to attract potential franchise owners. For instance, a food franchise that offers healthy and organic options may be more appealing to consumers who prioritize their health.

*** Capital: ** Capital is an essential factor, especially for new entrepreneurs. Is the capital needed to buy a franchise according to their financial capabilities? Is there a flexible financing scheme? A franchise with a reasonable capital requirement and flexible financing options is more likely to attract potential franchise owners who may not have the necessary funds.

*** Potential of Profit: ** Prospective franchise owners will consider profitability. Does the franchise business have high profit potential? Does the operational system and marketing strategies offered support business growth? A franchise with a high profit potential and effective operational system is more likely to attract potential franchise owners who are looking to generate revenue.

*** Brand: ** Strong brand and widely known provides its own benefits. Does the franchise have a strong brand recognition in the market? Is the brand able to attract consumers and increase competitiveness? A franchise with a strong brand recognition and reputation is more likely to attract potential franchise owners who want to associate themselves with a well-known brand.

The Role of Other Factors

The results of this study also showed that the four variables together explained 41.1% of the decision to buy franchises, while the other 58.9% were influenced by other factors that were not studied. This indicates that other factors such as economic conditions, market trends, business regulations, and personal factors also have an important role in decision making.

Conclusion

This research provides a clear picture of the main factors that encourage entrepreneurs to buy franchises. For prospective franchising owners, understanding these factors can help in determining the right choice and increasing opportunities for business success. By considering the advantages of the products, capital requirements, potential of profit, and brand recognition, entrepreneurs can make informed decisions when choosing a franchise business.

Recommendations

Based on the findings of this study, the following recommendations can be made:

  • Franchisors should focus on developing products with great market potential and unique features.
  • Franchisors should offer flexible financing schemes to attract potential franchise owners who may not have the necessary funds.
  • Franchisors should emphasize the potential of profit and provide effective operational systems and marketing strategies to support business growth.
  • Franchisors should invest in building a strong brand recognition and reputation to attract potential franchise owners who want to associate themselves with a well-known brand.

By considering these recommendations, franchisors can increase their chances of attracting potential franchise owners and achieving business success.

Limitations of the Study

This study has several limitations that should be acknowledged. Firstly, the study was conducted at a specific location, Sun Plaza Medan, which may not be representative of other locations. Secondly, the study only focused on the food franchise business, which may not be applicable to other industries. Finally, the study only considered four factors, which may not be exhaustive.

Future Research Directions

Future research should aim to explore other factors that influence the decision to buy a franchise business. Additionally, research should be conducted in different locations and industries to increase the generalizability of the findings. Furthermore, research should focus on developing a more comprehensive model that incorporates multiple factors to explain the decision to buy a franchise business.

References

  • [List of references cited in the study]

Appendix

  • [Appendix containing additional information, such as raw data, tables, and figures]

By understanding the factors that influence the decision to buy a franchise business, entrepreneurs can make informed decisions and increase their chances of achieving business success. This study provides valuable insights into the key factors that drive the decision to buy a franchise business and highlights the importance of considering multiple factors when choosing a franchise business.
Frequently Asked Questions: The Influence of Products, Capital, Profit Potential, and Brand on the Decision to Buy a Franchise Business

Q: What is the main purpose of this study?

A: The main purpose of this study is to reveal the factors that influence the decision to buy a franchise business, focusing on the food franchise business at Sun Plaza Medan.

Q: What are the four factors that were studied in this research?

A: The four factors that were studied in this research are:

  1. Products: The advantages of the products offered by the franchise, such as market potential and uniqueness.
  2. Capital: The capital required to buy a franchise and the availability of flexible financing schemes.
  3. Potential of Profit: The potential of profit and the effectiveness of the operational system and marketing strategies offered by the franchise.
  4. Brand: The strength of the brand recognition and reputation of the franchise.

Q: What was the research methodology used in this study?

A: The research methodology used in this study was a purposive random sampling method, which involved selecting a sample of franchise owners based on specific criteria. The data was collected and analyzed using descriptive and statistical methods, including validity tests, reliability, F test, T test, and determination identification (R2).

Q: What were the results of this study?

A: The results of this study revealed that the four factors studied together have a positive and significant influence on the decision to buy a franchise. The study also showed that the four variables together explained 41.1% of the decision to buy franchises, while the other 58.9% were influenced by other factors that were not studied.

Q: What are the implications of this study?

A: The implications of this study are that franchisors should focus on developing products with great market potential and unique features, offering flexible financing schemes, emphasizing the potential of profit, and investing in building a strong brand recognition and reputation.

Q: What are the limitations of this study?

A: The limitations of this study are that it was conducted at a specific location, Sun Plaza Medan, which may not be representative of other locations. The study only focused on the food franchise business, which may not be applicable to other industries. The study only considered four factors, which may not be exhaustive.

Q: What are the future research directions?

A: Future research should aim to explore other factors that influence the decision to buy a franchise business. Research should be conducted in different locations and industries to increase the generalizability of the findings. Additionally, research should focus on developing a more comprehensive model that incorporates multiple factors to explain the decision to buy a franchise business.

Q: What are the recommendations for franchisors?

A: Based on the findings of this study, the following recommendations can be made for franchisors:

  • Develop products with great market potential and unique features.
  • Offer flexible financing schemes to attract potential franchise owners.
  • Emphasize the potential of profit and provide effective operational systems and marketing strategies.
  • Invest in building a strong brand recognition and reputation.

Q: What are the recommendations for prospective franchise owners?

A: Based on the findings of this study, the following recommendations can be made for prospective franchise owners:

  • Consider the advantages of the products offered by the franchise.
  • Evaluate the capital requirements and the availability of flexible financing schemes.
  • Assess the potential of profit and the effectiveness of the operational system and marketing strategies.
  • Research the strength of the brand recognition and reputation of the franchise.

By understanding the factors that influence the decision to buy a franchise business, entrepreneurs can make informed decisions and increase their chances of achieving business success.