Growth vs. Expansion: Where Does Franchising Fit?


Franchising is a method used to expand a business. Some people may say that franchising could also be used to grow a business, but I beg to differ . “Growth” and “expansion” sometimes are used interchangibly, yet within the context of franchising, it is important to bring some differentiation to these terms.

Expanding a business connotes going to other markets and/or doing something different; that is, changing the scope of our business to hopefully bring in more revenue. On the other hand,  business growth indicates a progressive increase in income from doing the same thing or from outside influences. For example, when revenues are up, you may hear companies say:  “We experienced growth last year.” On the other hand, when a company has gone into other markets, you may hear them say, for example:  “We have expanded our business to Chicago” or “We have expanded our services to include house calls.”

When companes decide to franchise, they are committing themselves to doing things differently.  They may not be aware of this, but they are introducing radical change in the way they are accustomed to doing business. They are indeed expanding into new terrirories, literally and figuratively. After they franchise, they will grow their companies by adding franchisees and will continue to expand as they sell franchises in different regions of the country.

When franchising is first introduced into a company, it is all about expansion; and, expansion is about change. As you consider franchising your business, keep this in mind to help you get out of your own way, find new answers and new ways of looking at challenges. When doing something new, change is required, otherwise you won’t get to the success you are seeking.

So, are you ready for growth, or are you ready for expansion? Both require systems, intention, and strategy.