What is a Franchise?
Words like Franchise and merchandise retailer must be challenging to understand for many, so before getting into whether Target is a franchise or not, we must first know what precisely a franchise is and why the target is not one. So, the franchise is when a company allows a group of people or an individual to run their business or buy or sell products in the company’s name. It is like a group of people are doing business by using a company’s brand image, and there is no legal issue about that because the company has given them license and permission to do so.
What is the Difference between a Franchise and a Corporation?
Let us assume that two people own two different businesses. Now, if they want to expand their business, they have two choices ahead of them. They can either make it a franchise or a corporation. The corporation would be if the parent company opens more stores anywhere, those stores would be managed and owned by the parent company, or the parent company will hire employees for the same.
But that is not the case with franchises. The franchise is a whole different group of people who want to run their very own business in the name of its brand image. The company will give other people the right to open their business with its name and ask for royalties in return. This is an excellent way to expand one’s business without taking much of the responsibility of the franchises because when a franchise gets opened, it is the responsibility of the franchise’s owner and not the company. The company just had to collect its revenue.
Why is Target not a Franchise?
Target has its fair share of reasons to prove why it is not a franchise. If you take a deep look into them, you will realize that their reasons are pretty reasonable. The first reason would be that building and maintaining a target store as a franchise is very costly compared to opening a franchise of MacDonald’s. Setting up a target as a franchise is out of budget for many startups. As mentioned above, the target has made this brand image of theirs with sheer hard work, and they would not risk this into the hands of some other franchise. They only trust their own company’s employees for maintaining what they have already created.
Target does not like partnering with other businesses in the name of expansion. However, they believe that they have come so far on their own and in the future also they would like to do the same.Target’s brand image and social image are pretty good in the market. They sell quality products and have built their customer’s trust over the years, and building a franchise would be like risking it all. Another important reason the target is not a franchise is that they don’t need to be one. The revenue they generate from their stores is more than enough that there is no need for any further expansion.
Conclusion
This article concluded that Target is not a franchise and does not even need to be one. We talked about what is a franchise is the difference between a franchise and a corporation in detail. There are many reasons because of which target is not a franchise. All of them were discussed in detail.
1.How much money does one require to open a franchise in the target’s name?
A.According to the stats, nearly $57,000-$93,000 is required to open and maintain a target store. One also needs to pay $40,000 to get the license for the same.
2.How many numbers of employees does Target corporation have?
A.Target has approximately 350,000 employees. Target is under the top 10 largest retail chain stores in America. Target is a firm believer in hiring employees than making franchises. That’s what potentially makes target a corporation and not a franchise.
