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Useful Advices - Franchising - Some Negative Aspects
Although many people enjoy the benefits of franchising, there are still several disadvantages that a prospective franchisee needs to be aware of.
Buying into big and popular franchises is expensive. Their track record does not need much
Buying into big and popular franchises is expensive. Their track record does not need much
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
investigation since their outlets are most probably in every major town and city in the country, perhaps even abroad. Their popularity with consumers speaks well of the profitability of the brand. However, a prospect eyeing such franchis
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
es must be ready with a large amount of money or be able to make the necessary financial arrangements since the franchising fee alone can command a hefty price.
On top of the original franchise fee, royalties and a percentage of business
On top of the original franchise fee, royalties and a percentage of business
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
revenue of the franchise must be paid to the franchiser every month. In addition, the franchiser may also charge fees for the cost of advertising and promotional materials. These will be stipulated in the franchise agreement.
On the o
On the o
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
ther hand, buying a little-known and perhaps inexpensive franchise can be attractive especially to those who would like to start their own business but do not have the kind of money needed to buy a popular one. Prospects need to be aware
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
, however, that just because a business is offering franchises is no assurance that its franchises will be successful. In some cases, franchising itself is the business of the company. In this case, the franchisor is only interested in
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
selling as many franchises as possible regardless of whether the individual franchises will be successful or not. However, this is not to say that little-known inexpensive franchises are not worth looking into. Some of these may even pr
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ve to be a sound business concept that has just started. Therefore, all franchises, whether popular or little known, must be investigated carefully before making a final decision.
In franchising, although the franchisee owns the busines
In franchising, although the franchisee owns the busines
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
s, he is not an independent entrepreneur. He must follow all of the instructions of the franchisor, sometimes down to the smallest details, to ensure uniformity with all other franchises. Franchising does not allow the franchisee much c
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ontrol over his business because he has to adhere to an agreed method of operation. A tightly written franchise agreement gives the franchisee little latitude to deviate from the system of the franchisor. Some people may not be able to
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
live with this arrangement for extended periods because the restraints being imposed by the franchisor may be too limiting for their own personal style. This is the reason why it is important for a prospect to match his intended business
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
with his personality, preferences, and style.
There is always the possibility that conflicts between the own outlets of the franchisor and those owned by franchisees may occur, particularly if they are servicing the same general area.
There is always the possibility that conflicts between the own outlets of the franchisor and those owned by franchisees may occur, particularly if they are servicing the same general area.
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
One may cut into the customer base of the other and franchisor and franchisee will ultimately be competing against each other to some extent. It is also possible that there are too many franchises of the same brand in one area that franc
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
hises are pitted against each other. This scenario happens when the franchisor did not give much consideration to market studies but only to the financial gain with many franchises.
Factors such as interest rates, willingness of banks t
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
extend loans to franchises, the condition of the national economy, and competition come into play once a business starts to operate. The franchisee must be financially ready to absorb the negative impact of these factors.
An inevitable
An inevitable
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
aspect of franchising is the conflict that may arise between the franchisee and franchisor once the former starts losing money. More often than not, the conflict results in litigation, something that will be costly to both parties in te
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
rms of both time and money. Tremendous efforts and resources on the part of the franchisor are needed to ensure the success of all its franchises. The bad news is that not all franchisors have access to such big resources, hence limitin
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
g their efforts largely.
Not all franchisors offer the same degree of assistance in starting a business and later on running it successfully. Some provide training just for start-up operations and the franchisee is left on his own after
Not all franchisors offer the same degree of assistance in starting a business and later on running it successfully. Some provide training just for start-up operations and the franchisee is left on his own after
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
that. Others make assurances of continuous personnel training and support that they do not follow through on.
Deciding to get a franchise is good. However, its potential negative aspects must still be considered and addressed, because
Deciding to get a franchise is good. However, its potential negative aspects must still be considered and addressed, because
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
to be forewarned is to be forearmed. No franchiser is perfect, so it is up to the aspiring franchisee to objectively assess the profile of the target franchiser, and prepare for all the possible scenarios that might happen in the future
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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