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What Is a BPO Franchise?

By Theresa Miles
Updated May 17, 2024
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A business process outsourcing (BPO) franchise is an outsource service provider that relies on another outsource provider for business structure and operational procedures in exchange for a fee. There are certain BPO service providers that have packaged their set-up, business operations, and service delivery into a replicable system that can be implemented wholesale by others. Many are willing to pay for the ease of knowing exactly how to start and run a business to a certain degree of excellence.

Successful outsourcing relies on a third party provider convincing a company that it can manage one of its business processes more efficiently and at a lower cost than the company can in-house. Implicit in this pitch is the guarantee that the outside provider can deliver the service flawlessly as a seamless stand-in for the company. Hence, the system for delivering the outsourced business process is the service provider's product. A prospective business owner might want to jump into the BPO industry but not have the experience to design and test a system that avoids the type of new business trial and error that would kill the reputation of a BPO company.

A prospective business owner that wants to start an offshore BPO has the added difficulty of figuring out how to set-up the service in a foreign country. Fortunately, there are many BPO providers that have perfected a system for delivering an excellent service and have cracked the set-up in foreign markets. These providers package their systems and offer it to aspiring service providers as a BPO franchise. In exchange for branding, systems design, and support, the franchisee typically pays a base fee plus a percentage of sales.

For example, call centers are a popular BPO franchise. There has traditionally been more demand for outsourcing phone-based customer service than any one service provider could deliver. Enterprising companies package their systems and licensed their reputation as a brand to people who want to get into the business. The franchising arrangement takes the experiential component out of the project and allows a person with no functional experience to pay for an expert blueprint that he simply has to follow.

The BPO franchise can be a particularly effective way for a provider to enter the outsourcing industry and for the industry to expand. One of the key elements of success for a BPO service provider is the ability to attract clients. The use of an established operational system gives the new provider an air of professionalism and excellence that can increase a client's confidence. Some new providers have business relationships that can be turned into successful outsourcing if the provider could get a system up and running quickly. The BPO franchise fills a need in both instances, decreasing barriers to entry and infusing the industry with new blood.

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