Question

‘Pretty You’ is an established brand in the salon and makeover industry. It is currently operating in Delhi with a network of 5 branches. It now wants to make its presence known in different cities of North India and gradually would be establishing its identity throughout the country. For this, the company decides to give exclusive rights to independent retailers to take advantage of the brand “Pretty You” in return for their payment of royalties and conformance to standardized operating procedures.

Identify and explain the form of expansion discussed above.

Answer 1

1. Franchising is a method of business expansion where a company (the franchisor) allows independent retailers (the franchisees) to operate under its established brand name in return for royalties and adherence to specific operational guidelines.
2. In this case, "Pretty You" is offering exclusive rights to independent retailers to use its brand name and business model, enabling the brand to expand its reach into new cities and regions while maintaining consistency in service quality and operations.
3. The franchisees benefit by leveraging the established reputation and operational structure of the brand, while the franchisor gains through royalties and increased market presence.