Companies in the 21st century are often led to defensive-cautious market behavior in the face of globalization, digitization and the resulting growing competition. Often there is a return to the respective core business, investments and expansion plans are postponed in favor of economic security. However, this is counterproductive for companies' progress and sustainability in the long term. One solution to this problem can be franchising. Engel & Völkers describes the situations in which franchisees can drive the innovation process of companies, and why franchise concepts often have the advantage over other spin-off models.
The problem: The investment foundation for development is missing
The experience of recent years shows that companies, whether in production, raw material extraction or service industries, tend to have rather restrictive market behavior despite supposedly positive sales figures. In the course of such a corporate philosophy, much value is often placed on maintaining the profitability of the core business. At the same time, budgets for new developments and innovations are being cut. The application of alternative forms of work organization or expansion to new locations may also be affected. Investments in these essential areas are therefore no longer possible without further ado. In doing so, the technical, work-organizational and growth-specific progress of companies, which want to maintain their competitiveness in the future, should represent an essential position in their financial planning. If this aspect is not taken into account, market share losses are far from the only threat. Even internally, a defensive, overly cautious management style quickly leads to dissatisfaction among the workforce. Lack of motivation, decreasing self-initiative and decreasing identification with company and management can follow.
One way to avoid this misery while retaining the company's defensive stance is through the hive-off from franchises and spin-offs.