Even if you have never considered franchising your company it may be the right move for you. This is not an uncommon occurrence as, according to the United Stated Census Bureau, over 10 percent of all businesses in America have been franchised. If you have a service or product that gathers high demand in any stage, but becomes physically, mentally, or financially taxing then it looks like this may be a good fit. Because of demand, the chances of other companies growing more momentum with a higher cap of money, employees, and time is high. Franchising is a way to combat that growing chance by no longer relying on your own resources, but opening the company up to depend on the resources of others as well.

Franchising allows for unlimited expansion on a minimal capital investment from the franchisor. Because the franchisee signs an agreed upon lease, the franchisor can then expand with virtually no contingent liability, greatly reducing the risk for franchise initiation. This doesn’t come completely without risks though as finding the right people is vital to the success of the oncoming expansion. Hiring the right employees is always important, but much more when hiring unit managers. Typical companies have difficulty acquiring qualified managers and training them for long periods of time to only have them leave or be hired by another company. Unit managers, however, are more inclined to succeed as their profits are correlated to the success of the company, therefore allowing growth based on performance.

Among many of the obstacles to start a new location is the most important one that is having the time and resources to sustain the company substantially until new locations are open. Opening up new locations can take a lot of time whether that be for finding a location, hiring architects, clearing a used space, acquiring and installing equipment, signing the right leases, and more. Because of this it’s important to note that immediate opportunity gain is not likely when the decision to franchise is made. Keep the company’s reputation high, maintain the business, continue to build finances with the main locations, build hype through advertisement and marketing, and never stop being observant in the industry and economy to see if becoming a franchise is really for you at that exact moment.



Article by
Christian Peterson
Marketing Manager

Christian Peterson