So you’re poised for expansion. Congratulations! Business must be doing pretty well if you’re looking to set up in new buildings, hire more employees, and invest in more capital. Wait, what’s that you say? Business is going well, but you’re uneasy about expansion?
That’s not uncommon.
Sure, you have plenty of customers and steady orders, but like many businesses, you might not have money to expand on your own. Maybe you can’t find enough talent to manage and operate under expansion. Maybe you just don’t have time to expand, period. After all, to expand, you have to find new real estate to house that expansion. But you can solve these problems, increase profit, optimize expansion, and have a management structure without dealing with managers. Maybe franchising should be on your mind.
Franchising just might be the best move you can make to expand your business. How else can you get other people to showcase your brand as if it were their own? You’ve done all the hard work of coming up with a business idea and then presenting a successful enterprise. You’ve invested, planned, marketed, and developed a following. You believe now that you have a solid, repeatable business model in place with a strong brand presence. Well, that also happens to be what franchisees want. They want to buy into what you’ve accomplished. They figure that at this point, all they need to do is turn the key and drive away in your brand. Maybe it’s time to let them do it.
So the best thing about franchising is that all the heavy lifting of expansion is done by a franchisee. They supply the risk, and you just supply the brand. It’s up to them to provide capital for startup, the human resources to run the expansion, and the time and resources to find new expansion locations. So the money you save from having someone else take the risk just goes to further marketing and building your brand. Add to that the franchise fees and royalties that come your way, and you’ve got a pretty good deal. Franchisees also keep you a safe distance from lenders or investors who would later seek some control over your market expansion. Throw in freedom from legal liabilities of the individual franchises, and you’ve got a prescription for better sleep at night.
So many companies hit a wall when they attempt expansion. They become their own worst enemies because of poor internal communication, reluctance to take risk, and poor management. They just can’t get out of their own way. Franchising, however, dismisses these problems and simplifies your expansion process because franchises are like individual startups rather than companies trying to expand with their own resources. Franchises are also mostly just duplicating an existing operating process. That speeds things up as well.
With franchises, you basically have a network of partners running outposts of your brand in other locations. These entrepreneurial partners will simply take your established brand and market it for you through their own individual enterprises. This is the support you need, and because they’re all independent owners, you don’t have the corporate headaches you might have if they were all company employees. For example, your franchisee partners are most likely going to be motivated by their own self-interest to make sure their business has ROI. You’ll probably find less inspiration from people working for your company.
Did I Mention Profitability?
As you can see, these are some compelling reasons to welcome franchisers for your thriving business. Many reasons exist for why franchising works, but whatever name is given for each reason, it all comes down to economics. Franchising is a pathway to save you money, give you royalties, and boost your market share.