When we look at the current market scenario where jobs are a scarce commodity as the economy is in a downward spiral, there is a big cause for concern. Therefore, it is of a paramount importance that we meticulously plan our future well in advance. For a middle class person like me, it’s a dream to own a business and ZARA Franchise gives you that rare opportunity. It is a business model which yields relatively high returns on a low to medium investment. ZARA is a very well-known and a very well respected brand all over the world. An opportunity to associate with the ZARA Franchise would give you an entrance into, and understanding of, the ever growing and extremely lucrative industry of apparel retail.
ZARA Franchise was founded by Amancio Ortega and Rosalía Mera in A Coruña, Galicia, Spain in 1975.It was however opened out of desperation and as a last resort, when a wholesaler cancelled a large order in which all of Ortega’s capital was invested. So he decided to sell the merchandise himself and opened the first ZARA store. The first store also featured low priced lookalikes of popular high end brands and it proved to be a huge success.
As the ZARA Franchise gained popularity, Ortega started the global expansion of the brand in 1980 and entered the US in 1989. ZARA is controlled by the parent company called Inditex group which also own the companies like Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius, and Uterqüe. As of 31st January 2012 ZARA has over 1631 outlets in around 82 countries and has over 42 stores in the US. With the contribution of US being marginal at the moment to the $2.5 Billion profits posted by Inditex, the growth opportunities of the ZARA Franchise in America are immense and with ZARA planning to open multiple outlets in all the major US cities the future of the brand is looking very bright.
The business model of the ZARA franchise is based on the motto “High Fashion at affordable price”. ZARA stores don both men’s and women’s clothing and subdivided into lower and upper garments, accessories, shoes and cosmetics. ZARA boasts low prices for smart in-fashion clothes. It takes two weeks for ZARA to develop and display the products in their stores. ZARA Franchise launches over 10,000 different designs in a year which is way higher that of the industry average. ZARA has over 200 designers who design new products keeping in mind the current trends. They also take into account the feedback received from various store managers from all over the world and therefor keep abreast with the consumer’s likes and dislikes and design their products accordingly. They produce in small batches per product with an extensive variety.
The other unique factor in ZARA Franchise business model is that, it’s a vertically integrated retailer unlike other apparel retailers. This gives them a tremendous control over all the aspects of production like supply chain, designing, manufacturing and distribution of it’s product. This makes the business more cost effective as they don’t have to outsource the different processes. ZARA also boasts “word of mouth marketing” as they believe that if the product is good it will sell. Window displays also play an important role in promoting the products.
ZARA offers their franchisees full access to corporate services, such as human resources, training, and logistics at no extra cost. They also allow the stores to return up to 10% of purchased merchandise, which is a higher level than many other franchises. The ZARA Franchise usually runs into profit by the end of the first year and if there is any debt on the start-up cost, it would be recovered by the end of the third year. All you have to do is contact the corporate office and depending on the city you live in, you can apply for the ZARA Franchise.