Pros and Cons of the Distributed Franchise E-commerce Model

The distributed franchise e-commerce model strives to position franchisees as the primary beneficiaries of e-commerce success while maintaining a consistent service experience with a franchisor-controlled back-end. In this scenario franchisees operate their own transactional websites on their own domain, taking charge of catalog management, local marketing, and customer service, but the platform is provided by the franchisor. 

To the outside world, the franchisee becomes the true commercial arm of the brand, both in the physical and virtual worlds. In the backend, though, the franchisor exerts complete brand and pricing control, and limits orders to the franchisee’s licensed territory. 

The franchisor also supplies global marketing power, top-down value-added content, and a centralized online catalog that can be automatically synchronized and optimized for local sales. 

Franchisees can enrich their local web stores with additional content. And, when allowed by the franchisor supplying the technical environment, franchisees can supplement the standard catalog with their own products. This model, therefore, works well to support not only manufacturers’ retail networks but also hybrid franchising models and multi-brand franchisees with complementary products. 

Developing an effective franchise strategy for e-commerce does not come without intimidating challenges. Before organizations identify the best online business model for their franchise, flexibility is key. That ingredient, perhaps more than any other, is the key to the enduring success of their e-commerce endeavors.