Franchisors - Advantages
— Rapid expansion of chain dispersal.
— Low-risk chain expansion may be achieved with a relatively small independent financial and administrative resource investment.
— Franchise sale provides the franchisor with additional resources for development, expansion and other purposes. Franchising fees and royalties collected regularly provide the resources necessary for chain development.
— In many cases, the business performance of franchised units is better than that of company-owned branches, as the former are operated by people with powerful motivation to succeed and turn a profit. It is difficult to achieve such motivation among salaried managers.
— Accelerated contribution to the company’s market reputation.
— Concentrated, large-scale procurement and distribution reduces management and operating costs.
— Advantages of scale in marketing and sales promotion.
— Effective and rapid two-way communication between the chain and franchisees, enabling regular provision of information and introduction of changes and improvements.