Is Franchising the Right Marketing Strategy for You?

It is widely known that franchising is one of the most highly leveraged business systems available for growing companies. It is to be used by companies and individuals to expand their businesses faster than normally possible under the company owned store or branch method. 

Because franchisees make the capital investment for each location, the franchisor is able to organize and establish a regional or national expansion at considerably reduced costs. In some cases, the franchisor can often set up an entire franchise program for less than the cost of opening an additional store of branch.

Further efficiencies are gained by having an owner present at each franchised location. Because the franchisor is not directly responsible for the bottom line performance of each unit, most of the daily management hassles are eliminated. 

The franchisor is free to concentrate on developing the business rather than managing the daily activity at each location. It is also a known fact that franchisees average 10% higher sales and 5% to 10% lower expenses than comparable corporate units because of their franchise association.

Remember, over 40% of the retail sales volume in the United States comes through franchises and yet only 8% of those businesses are franchised. Franchising is a proven tool to capture market share which typically increases profits because it gives the business owner three distinct advantages:

1. A name brand identity
2. A system of doing business successfully
3. A support structure which allows franchisees to be in business for themselves but not by themselves

Franchisees are able to establish their businesses with minimal risk. Franchising as a whole has a 92% success rate. Franchisees are attracted to these types of programs and will look to the company that can best demonstrate a good track record, competent management and a good training program with systems and support.

Back to the start of this section