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Why Franchise?

Apr 10, 2018

Franchise or Organic Growth?

Colonel Sanders said this, “I could see it wasn’t going to be easy. I couldn’t give a franchise to any old greasy spoon. And I knew the chicken had to be cooked the way I told them to cook it if it was going to be as popular as it could be.”

Obviously, the Colonel figured it out.  There are nearly 4500 franchise units in the US.

Yet, should you franchise your business?  There two paths to add new locations beyond your existing store. The first is by organically growing where you expand by building new locations using your time, money and energy.  The next option is by developing a franchise system.  When you franchise your business you sell the rights to use your business name, logo, products/services, trademarks, and business model to an owner-operator, also known as a franchisee.  Franchisees use their capital to purchase these rights and build their own storefronts.

There 7 good reasons why many businesses prefer to franchise as a means for growth.  The primary reason is the opportunity to expand rapidly without investing a lot of capital.  Unit buildouts and grand openings are incurred by the franchisee.  And, since the design of the store matches that of your original store, the buildout time is less and so is the expense.  Here are some other good reasons why franchising is the best way to grow your business.

  • Staffing is performed by the franchisee — Recruiting, hiring and training practices of employees are designed by corporate but executed by the franchisee.
  • Greater brand recognition — Rapid growth allows for greater brand recognition.
  • Higher unit sales potential – Franchisees have vested interest to succeed and compete in the marketplace.
  • Group buying power – With increased buying power within the franchise system, comes leveraged contracts
  • Access to better talent – Most franchisees are successful professionals with a high business acumen, highly competitive and driven by $$$’s.
  • Promotes the ‘American Dream’ – Everyone should have the opportunity to achieve success and prosperity. By purchasing a ‘business in a box’ a savvy person can achieve their dream of owning their own destiny.

Click here to receive your free whitepaper on Franchising vs. Organic Growth.

If you are an entrepreneur thinking about expanding your business, then we can help.  Not every business can be a franchise.  We can help you assess which path is best for you.

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