10 reasons why you should consider franchising to grow your business

Having recently worked on taking a client through the franchise process I thought it would be good to share 10 reasons why I believe businesses should consider franchising as an alternative route to expanding their business. 

  1. Franchising can be cheaper alternative to expansion as the franchisee funds the required capital costs to set up in a new area;
  2. Using a successful franchise advisory team allows you to open in more than one area at a time enabling you to expand quicker than you maybe could simply opening in new locations with managers.  As the success grows so will the interest for neighbouring franchises.
  3. For some locations an outsider coming in can be seen negatively therefore greater market penetration can be achieved with "local" people running the “local”franchise.
  4. Franchisees have a financial as well as personal interest in their franchise succeeding compared to a managers employed to carry out the same function, therefore increasing the chances of success.
  5. As each franchise will be a separate business there is a reduced responsibility for additional employees as the franchisee will be responsible for their own.
  6. Many clients tell me that they don’t want to expand as they will lose control of their business. Franchising allow for greater control when as franchisees have to follow your systems or they will be in breach of the franchise agreement.
  7. Economies of scale mean company owned regions become more profitable as a result of additional franchisees.
  8. You get to choose your franchisees so you get to work with like minded people and pass on your beliefs and objectives of your brand.
  9. For those considering their exit strategy successfully franchised business can demand a higher sales price than a non-franchised business.
  10. Get all the above right you will receive monthly royalties on average of between 5% and 15% depending on the business.

If you would like to know more about what franchising involves and whether it is appropriate for your business then please get in touch with Grant Smith, Business Services Partner from our Rosehill office in Carlisle.

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