Franchising is a model that can unleash the full potential of your business and allow it to grow into a national and international powerhouse. As a Franchisor you can expand your business and dramatically increase its value. As a Franchisor no longer will your business growth be constrained by your cash flow or by the headaches of managing and motivating customer facing staff. Franchisees invest their capital into establishing and operating a site. Franchisees employ the staff and franchisees operate the business. Franchising can take you and your business into a whole new world!
Franchising has proven to be an extremely successful business model for helping small (and large) businesses to grow. You provide franchisees with those elements that have helped make your business successful, such as:
Your Brand –A brand that is known by its customers to represent particular products / services and a high level of customer service, a brand that has started to gain customer loyalty, and a brand that is well presented. Much of the success of franchising relies on the value of your brand.
Your Business Model – the expertise you have developed such as knowing, for example:
- what equipment is required to start a business
- what suppliers to purchase from to retain product quality
- what IT systems you use
- the optimal prices at which to sell your products / services
- the number of staff an operation needs and when
- what customers the business targets
- where the business should be located
- how the business is run on a daily basis
All of the things you have learnt about your business, and being in business, are valuable contributors to the success of your franchise network.
3. Your Ongoing Support – knowing what is required to continually grow and expand a business and helping your franchisees to grow and expand their customer base, run their business more efficiently and increase profitability.
What does a franchisee bring to the relationship? The franchisee’s contribution includes:
Their capital – to pay an upfront Franchise Fee, to pay for the establishment of their site (or to purchase an existing site from you), to pay all of the operating costs, to purchase stock and to pay ongoing franchise royalties and levies
Their motivation –
Q. Who cares the most about any business?
A. The Owner.
Q. Who usually works hardest and performs best in a business?
A. The Owner.
Franchising allows you to have multiple owners, all caring about, and working hard in their business to make it successful… More successful than the average employed manager will ever be.
3. Their ideas – franchisees bring new perspectives and insights into the business. They want their business to be more successful so they’re always looking for ways it can be improved. Where would McDonald’s be without its franchisees? Well for a start, imagine a McDonald’s store without the Big Mac, Ronald McDonald, a breakfast menu, Fillet of Fish etc.. The list goes on. All ideas brought to the business by its franchisees.
4. Their local knowledge – franchisees bring and develop knowledge of their customers built through long term relationships (the franchisee doesn’t change jobs after 12 months just when your customers are getting to know them) and they bring their ideas for how the business can be marketed in their local area. Their desire to build relationships with local communities including schools, sporting teams etc and other local businesses potentially allows them to tap into markets you previously did not reach.
Franchising is a very powerful business model for helping businesses grow. A well designed and well run franchise can provide long term happiness for franchisors and franchisees alike, working together to build successful businesses. If you believe your business has the ability to grow, then franchising could be for you.