7 Reasons to Franchise your Business

Business owners considering growing their companies often want to know which is the most suitable expansion vehicle. Should they franchise or should they expand by hiring staff and opening locations or satellite offices?

The answer depends on each company’s objectives, their resources and the personalities and values of the principals. Companies that decide to grow by expanding their own operations retain control, total ownership, and  future revenues. On the other hand, those companies choosing franchising share in the cost of expansion, but have to give up some level of control and ownership, as well as the majority of future revenues.

So why should you want to consider franchising as an option?

Here are 7 reasons why:

  1. Someone else, that is the franchisee, provides the required capital for each new location.
  2. Your company can grow more quickly by opening franchises than by opening company-owned outlets because capital will not be an issue.
  3. Franchisees have an economic as well as a personal interest in ensuring that the new location succeeds. Because of their personal financial investment, franchisees will typically be more motivated than company employees.
  4. Franchising allows you to grow without sacrificing control over the business. You may not have minute by minute control, but you have control over how franchisees operate the business; you create and dictate the operating system. If franchisees don’t follow your system, they are in breach of the agreement.
  5. The successes of one location spill over to the rest of the franchise network.
  6. Your own locations benefit from the economies of scale that arise from the franchise network. These savings make your company owned locations more profitable.
  7. You get to nurture other business people, and provide opportunities to others by sharing your experience and knowledge. You create a team and partner up with like minded people who share your values and objectives of growing your brand.