Is Franchising Your Business a Path to the Growth of Your Dreams?

It takes a lot of hard work and innovation to get a business to the point where it runs smoothly, efficiently, effectively and profitably. That’s a rewarding attainment in the lifecycle of your operation - but what if you yearn for more? What if you want a higher degree of growth; to supercharge your business and make it bigger, better, stronger, faster...? There are a number of effective means for expanding a business’ scope and taking a bigger bite out of the market. You could:

• Offer more products and/or services
• Expand your market
• Pump up your advertising
• Hire associates to help you accomplish more
• Go all-in on innovation

There’s one particular route that checks many of the above boxes, while preserving and leveraging your existing, success-proven business model - Franchising.

Franchising is a legal way of "cloning" your business’ successful products, services and operating practices (your "brand") and selling the rights to your specific, trademarked business model (which includes your business systems, suppliers, training and ongoing support) to others. Buyers, your franchisee, in turn, are granted the right to run a duplicate of your business. Think of a franchise as a portable version of your business - one that can be packed up, transported, opened and operated from an independent location. Franchisees pay the franchisor an upfront franchise fee and ongoing royalties. Franchising represents a low-risk, high return investment for the franchisor.

So, could franchising be a route toward the bigger business of your dreams? Let’s examine what may - or may not - be in it for you.

Franchising advantages

• Franchise fees coming in offset your costs of expanding to a new location.
• Because multiple franchises can be opening concurrently, your business can grow more rapidly than if you were making a single expansion on your own.
• Franchisees are more invested in - and motivated to work toward - the success of their own location than employees might be.
• Since your franchisees will be local to different areas than you are familiar with, they’ll be better able to serve those markets.
• The franchise itself gains wider brand recognition because its franchisees spread it for them far and wide - and from their own marketing funds.
• Franchisor’s revenue from a franchisee is based on the franchisee’s revenue and not their profit; so even if they’re not turning a profit, you’ll have a steady income stream.
• Franchises represent high financial return with minimal financial risk to you because it’s the franchisees who are making the investment instead of the parent company.
• A franchise can become extremely valuable due to wide exposure.

Franchising disadvantages

• There are considerable upfront expenses for such things as legal assistance, establishing and documenting a replicable business model, compiling operation and training manuals and materials, advertising and recruitment of franchisees.
• A franchisor has less direct control over franchisees than over employees because, even though they’re using the same "playbook," they’re operating an independent business of their own.
• A collection of independent franchisees won’t be as cohesive a network in advocating for the core company as would, say, managers all working for the same company.

As you can see, there are many advantages to franchising to take your business’ scope of influence to a whole new level. Unless cutting-edge innovation is your path to bigger and better heights, franchising may be worth your consideration.

Is franchising a possible way to grow your business?