Updated: Feb 5
Franchising grows your business using other people’s time, money & people
Franchising is being employed by more and more types of businesses than ever before. Today, almost any product or service can be distributed through franchising. Whether you have a unique concept to introduce; an existing business in need of faster growth; or just don’t have the capital to expand, franchising answers the three key problems of slow growth, lack of capital, and finding the right employees. In short, franchising is your creative solution to the problems of Money, Time, and People.
Money: Franchising Fuels your Business
Franchising transfers almost the entire cost of expansion to franchisees. Franchisees can construct the building or pay the rent, buy the inventory, pay the employees and provide the working capital until sales make the business profitable. The growth of a franchise is limited only by the number of people willing to buy the franchise and the number of locations that can be sold. What is the cost to the franchisor? Often, it is no more than it would cost to establish a single, new company-owned unit.
Time: Win the Race to Business Growth
Anxious to move quickly before the competition catches on? Got a hot, new concept? Want to exploit a new marketing opportunity? Franchising is the one growth system that allows businesses to expand exponentially. A franchise can grow fast simply by selling individual units. Some franchises can grow even faster by selling multiple units or territories to sub- franchises. Either way, it is usually faster to open franchises than company-owned units.
People: Get the Right People for the Right Job
A good manager is hard to find. And franchisees make excellent managers. Why? Because they have a vested interest in the business. They own it. Through franchising, a company gets both dedicated managers and relief from the problems associated with hiring and managing personnel.
The cost of franchising is often a smaller investment than the cost of establishing just one new outlet. After paying the cost of the franchise program, the remaining costs of expansion (as well as most of the risk) are assumed by franchisees. And since franchisees usually pay the franchisor an up-front fee and royalties, the right strategy for selling your franchise idea can become an immediate, high-impact, low-risk revenue source.
Franchising is the modern way to raise capital.
The cost of franchising is often a smaller investment than the cost of establishing a new one. After paying for the cost of the franchise program, the remaining costs of expansion as well as the risks are assumed by the franchisee. And since they pay you an upfront fee and royalties, the right strategy for selling your franchise idea can become an immediate, high impact, low risk revenue source. Franchising can provide the capital for rapid growth, especially if you fit into any of these scenarios:
If you don’t have the capital, people or time to create a company-owned growth system
If your business has the potential to grow faster than a company-owned program
If you want to supplement an existing distribution system
If you need to improve systems through tighter controls or more motivated management.
Francorp can help you decide if franchising is the correct choice for you. We have provided service to various well-established franchises. Speak to our Franchise Analyst who will evaluate your concept, your company and your goals. Franchising is not for every company, but it could be for you.