DRUGSTORE AS A FRANCHISE - IS IT A BUSINESS IDEA?
Current as of: 03.02.2023
Skincare, hygiene and make-up products are very popular with consumers regardless of the season. For many entrepreneurs, therefore, opening a drugstore may seem a particularly interesting prospect. This step does not at all have to involve large investments and the need to build your own brand if you decide to run your business under a franchise model. There are a number of companies in the cosmetics market that have all sorts of cooperation offers for franchisees. Can signing a contract with any of these brands really be profitable?
What is a franchise?
Franchising is a business model between companies that involves one party (the franchisee) operating the business according to the guidelines of the other party (the franchisor). What type of obligation the cooperation involves depends on the arrangement between the parties - it can be either the sale of products or the provision of specific services. Numerous Polish and other drugstores operating in our country use the franchise system. In this case, the franchisor offers the opportunity to operate outlets under the banner of its recognisable brand and sell products specific to the chain in them.
How difficult is it to run a drugstore? Franchising and resulting obligations
To many budding entrepreneurs, opening a drugstore franchise may seem like a sure business. After all, the demand for cosmetics, care products or bath accessories remains consistently high and ensures a continuous flow of customers. A drugstore can be visited even more readily if it is part of a large chain of outlets whose common point is a reputable, market-recognised brand.
It is usually the franchisee's responsibility to find a suitable premises, which will then be decorated according to the guidelines and with the visual identity of the licensing brand. The chosen facility must be large enough to accommodate not only the main part of the shop, but also spaces for employees. The location of the drugstore is important for its profitability - it should be in a location that is easily accessible and frequently visited. Particularly attractive locations for shops of this type are shopping malls, city centres or frequently frequented pedestrian areas. This does not mean, however, that it is impossible to run such a business in less populated towns and cities - drugstores are successfully operating all over Poland, and the most popular brands are also developing their network outside major conurbations.
To avoid unprofitable investments and to look after the brand's reputation, franchisors verify the knowledge and skills of the people they intend to entrust with the running of the drugstore. Knowledge of the industry and the operating standards of a particular network is key. Entrepreneurs who plan to set up a drugstore must prepare themselves for the need to constantly improve their competence and adapt to the conditions dictated by the licensing entity. The training offered by the company to familiarise employees with the principles and specifics of the brand must also be completed.
Own drugstore vs. drugstores in a franchise model - which to choose?
Both private and franchised drugstores can be a successful investment if they are run professionally and with commitment. In order to make a good decision on which form of business to choose, it is useful to know the differences in running the two types of shop. Running a drugstore under the franchise model is much more convenient - the agent does not have to take care of the stocking. By contrast, the advantage of the freedom to choose goods is that the variety of brands available on the market makes it possible to compose a particularly attractive range for the consumer. A private drugstore can successfully become specialised in a particular niche, such as organic cosmetics.
Working with a reputable brand means lower business risk. Building customer trust is not necessary and franchisors take care to provide their partners with the necessary know-how through comprehensive training modules and detailed guidance on every aspect of the drugstore operation. In the case of an in-house shop, market analysis or marketing activities must be carried out by the entrepreneur. However, it should be borne in mind that the use of a licence of a recognisable brand involves the payment of fees for this and the franchisee does not have the option to make changes to the imposed business model.