When it comes to growing your business, franchising can be a practical means of expansion.
You spent years building your business. You risked your financial security. You poured your heart and soul into it. Now, you are beginning to enjoy the rewards; the public recognizes your name. You have your operations down to a system. Your customers are loyal; and many ask if you intend to open other locations.
You want to expand, but the problems are clear. You worry about where you would find good managers; you know that no one cares about a business more than its owner. What about time? A new location would require your full attention, and you are already spread thin. And money? You are understandably reluctant to jeopardize your existing business.
When it comes to growing your business, Francorp’s Vice President of Marketing, Bill Paige, believes that franchising has become a popular means of expansion. Currently, 10 percent of the U.S. private sector economy and 14 percent of private sector employment comes from franchises. A new franchise opens up every seven minutes in this country, and they account for over $1 trillion in sales every year.
“Take a short drive down any city street, and you will probably see a half-dozen or so franchised businesses, and most are doing very well,” Paige said. “That’s no coincidence. Franchising is a proven model that works.”
Franchising combines the strength of your business with the motivation and financial resources of individual entrepreneurs. According to Paige, the benefits of choosing franchising as a vehicle to development are clear: It ensures quality management, faster expansion, increased brand name recognition and increased buying power.
“Franchising has an established growth model and speed to it. If you have a great business idea for a franchise but you lack the time and capital to expand it, then you can become a franchisor and get people to pay you to make your name even bigger,” Paige said. “In return, franchisees get to operate their own small business.”
According to Paige, one of the bigger draws to expanding by way of franchising is the cost and speed. For an established company looking to open more locations, it would cost them less to go through franchise development, and, within a year, they’ll have everything ready to go in their new system. In general, franchising is a good choice if an entrepreneur is lacking the capital.
But despite the ease of use and practicality, Paige says entrepreneurs often have their hesitations when entering the world of franchising—especially when it comes to misconceptions about lack of control and limitations of creative freedom. According to Paige, this is one of the most pervasive myths about franchise ownership. In actuality, the franchisor is in full control, and the brand must adhere to that process, vision and level of quality control.
“When it comes to expansion, the first thing we see at Francorp are entrepreneurs who know very little about their franchising options—they usually don’t consider this route for one reason or another,” Paige said. “But ultimately, once they realize just how cost effective and efficient the franchise system is, many realize that finally expanding their business is well within reach.”