It takes an awful amount of courage and conviction to start a business. There are risks involved when starting out and many businesses never fully get off the ground. However, if you have succeeded and your business is growing, you may want to explore new avenues. Expanding and franchising is not for everyone, but for some, it is a great way to increase profits and income streams.
Franchising is when a company lets others use their name, business model and brand for a period of time. The franchiser becomes a supplier who allows the franchisee to distribute goods for a fee. For those who wish to expand their reach without risk of financial losses, franchising is preferable to chain stores. The franchisee will take on the brunt of the work while the franchiser can thrive.
This is a model that has proven successful. According to the 2010 U.S. Census Bureau, franchises made up 10.5 percent of business across industries in the year 2007. Inc.com reports that franchises accounted for $1.3 trillion in revenue that year and $153.7 billion in payroll to 7.9 million workers.
However, it is not safe to assume that franchising is right for you and your business. Creating a franchise is a big step and you have to make sure you are ready. You will transition from a successful business owner through hands-on operational management to a franchiser. Over the coming years, you will likely become less and less involved in the on-the-ground operation.
If that does not scare you away, then it is time to talk about your goals. Here are a few good reasons to consider franchising your business:
- Your business has become so successful that expanding will clearly result in additional sales.
- You have developed systems to market your business that are easily replicated in new markets.
- You have a solid trade name, online presence, product and know your market.
- You would simply expand yourself, but you would rather not have to recruit a new managerial staff on your own.
These are big decisions that require deliberation. Make sure you discuss your business options with a New York business lawyer who has helped other companies expand and grow.