What Are the Advantages of Franchising Your Business?
As a proven business and distribution model, franchising provides the following benefits for franchisors:
Cost-Effective Expansion – Franchisees handle the research and funding for outlets in your chain, which means you do not have to spend your own capital or request additional funding from banks or investors in order to grow your business.
Marketing Support – Every franchise location uses the same tried and true marketing plans, which helps eliminate the costly guess work when starting an independent business. You will also have the power of a national and/or regional advertising fund.
Additional Sources of Revenue – As the franchisor, you will receive additional income in the form of on-going royalties paid by your franchisees, depending on your franchise agreement. Royalties typically include a monthly fee including a percentage of the franchisees gross sales.
Acquiring Talented Managers – The managers chosen to run each franchised location will have a vested interest in its success, unlike a salaried employee, and will be responsible for handling any issues related to employees, workers’ compensation, etc.
Scalability – Depending on your needs and goals, you can customize your franchise agreement to focus on large volume national growth or low volume regional growth.