Should You Franchise? How to Decide

Owning a successful business model brings up a thought for expanding, but how do you grow your business without spending millions? Franchising is a growth opportunity for business-owners which allows entrepreneurs to sell the rights of their establishment to another person to open another unit of the same business. In a franchise agreement, the buyer pays the business owner a percentage of the sales by operating the replica of the brand which follows the same business structure as the parent company. Both the franchisee and the franchisor benefit by this expansion as the brand builds a name for itself in another location and the sales depend on the reputation.

Why should you franchise?

Generally business owners decide to franchise their successful business model due to three main reasons:

  • Lack of resources for expansion
  • Lack of reliable management
  • Lack of time

Being short of capital is still the biggest barrier faced by companies when they think about expanding their business to other locations. Franchising, on the other hand, allows companies to expand without the risk of debt or the cost of equity. Since franchisees provide the initial investment for opening another branch, franchising is the safest option to expand without capital. Also, the franchisee is legally responsible and accountable for the new unit, the franchisor is free of liabilities too.

Finding a dedicated manager to supervise the new branch would have been very difficult as they can leave or even worse, be hired by competitors by luring then into a higher pay. But in a franchise agreement, the franchisee can serve the purpose of being a reliable unit manager since his investment is at stake and he will do his best to make the company work.

Opening another branch of an establishment requires a lot of time. Hunting for a suitable site and negotiating the lease, all of these processes which usually takes you back in the place where you were about to start the business in the first place. Hiring and training the staff, purchasing the equipment, all this limits your dreams of expanding in a given period of time.

For companies who wish to grow against the timeline and without any risks, franchising is the best option, that’s because it is the franchisee who does the most of the growth tasks.

business location

Is your business capable of being franchised?

Franchising is an extremely flexible option and almost any business can be franchised but it needs to fit some of the basic criteria. Here are a few characteristics which can determine if your business can be franchised:

  • It needs to be reputed– your brand identity works like a charm here. If your parent branch has earned a name for itself, the other branches will surely follow.
  • It needs to be unique– Your business needs to be different from that of your competitors, in this way it is more likely to succeed.
  • It needs to have a fixed system– Your establishment needs to have a system that can be passed on and taught with all the processes documented.
  • It should be capable of generating a decent income- profitability is one essential factor when you are looking to franchise your business.

26 comments on “Should You Franchise? How to Decide”

  1. Hello there! I just wish to offer you a big thumbs up for your excellent information you’ve got here on this post.
    I am returning to your blog for more soon.

  2. Hey there, I think your site might be having browser compatibility issues. When I look at your website in Ie, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, terrific blog!

  3. Hmm it appears like your blog ate my first comment (it was super long) so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying your blog. I as well am an aspiring blog blogger but I’m still new to everything. Do you have any points for rookie blog writers? I’d really appreciate it.|

  4. Hi! I know this is somewhat off-topic but I needed to ask. Does running a well-established website such as yours take a lot of work? I’m brand new to running a blog however I do write in my journal everyday. I’d like to start a blog so I can easily share my experience and thoughts online. Please let me know if you have any kind of suggestions or tips for new aspiring bloggers. Thankyou!

  5. Hi there, just became alert to your blog through Google, and found that it’s really informative. I’m gonna watch out for brussels. I will appreciate if you continue this in future. A lot of people will be benefited from your writing. Cheers!

  6. hello there and thank you for your info – I’ve certainly picked up something new from right here. I did however expertise some technical issues using this website, since I experienced to reload the website a lot of times previous to I could get it to load correctly. I had been wondering if your hosting is OK? Not that I’m complaining, but sluggish loading instances times will often affect your placement in google and can damage your quality score if advertising and marketing with Adwords. Anyway I’m adding this RSS to my email and can look out for a lot more of your respective interesting content. Ensure that you update this again very soon.

  7. There’s ceretainly a lot to fiknd outt about tis issue. I love alll of
    the poinnts you’ve made. It’s tthe berst time too makje some
    plpans ffor thee future andd it’s time too bbe happy.
    I’ve read this post and iif I could I want too suggesdt you ffew
    interestjng thinngs orr suggestions. Matbe yoou caan writge nextt aricles referrting
    tto this article. I wabt tto read evesn moree things aboout
    it! I’ve been suirfing online more than tthree hlurs
    today, yeet I never fiund aany interesting artkcle ike yours.

    It iis pretty woorth enouth ffor me. Personally, iff all weebmasters aand bloggerts maade gookd contenjt ass yoou did, thee wweb wiol bee uch more
    uuseful than eer before.

  8. Once I originally commented I clicked the -Notify me when new comments ffpovv are added- checkbox and now every time a comment is added I get 4 emails with the same comment. Is there any method you can remove me from that service? Thanks!

  9. May I simply say what a comfort to discover somebody that actually knows what they’re discussing online.

    You definitely realize how to bring an issue to light and make it
    important. More people have to check this out and understand this side of the story.
    I was surprised that you aren’t more popular
    since you definitely have the gift.

  10. I really love your website.. Very nice colors & theme.
    Did you create this site yourself? Please reply
    back as I’m planning to create my very own site
    and would love to find out where you got this from or just what the theme is
    called. Kudos!

  11. Hi would you mind letting me know which webhost you’re
    working with? I’ve loaded your blog in 3 different web browsers and I must
    say this blog loads a lot faster then most. Can you recommend a good internet hosting provider at a honest
    price? Many thanks, I appreciate it!

Leave a Reply

Your email address will not be published. Required fields are marked *