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“The Accidental Franchisor?”: When is Franchising Right?

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

Date: 07/29/2011 | Category: Start a Franchise | No comments

In "The Accidental Franchisor?" Angus Loten of the Wall Street Journal discusses the unintentional or "accidental" path that franchisors Cathy Deano and Renee Maloney followed in establishing their "Painting with a Twist" franchise system. The "accidental" nature of Deano and Maloney's franchise venture stems from Deano and Maloney's statements that when they established their business they "knew nothing about franchising" and – by implication – did not intend to franchise their business. So‚ after establishing four successful business locations‚ what prompted the establishment of a franchise system? According to Deano‚ demand from "enthusiastic clients who wanted to buy into the concept and host their own classes." In addition to client demand‚ after establishing four of their own stores‚ it appears that future growth required Deano and Maloney to adopt a new business model for expansion. Franchising was the model they adopted and‚ it appears‚ was the right choice.

Interested in Expanding Your Business through Franchising? We recommend reading:
"The Franchsie Formula: A Guide for Franchising Your Business in the New Economy"

To be certain‚ "franchising a business" is not something that happens by "accident" but‚ rather‚ is often the product of a successful business owner seeking out a structure or system to facilitate regional or national growth. In most instances "franchising" is a natural progression for successful entrepreneurs. As a "business model" some of the primary benefits of "franchising" include:

  • Expansion. The franchising business model is premised on unit growth and business expansion. Many entrepreneurs – like Deano and Maloney – after establishing a successful business with strong demand‚ eventually‚ must confront growth. That is‚ to expand beyond one‚ two‚ four or ten units how do you raise the required capital and managerial staffing to expand regionally and nationally. Franchising addresses these "expansion road blocks‚"
  • Capital. Expansion requires capital. Franchising serves as a source of capital wherein franchisees finance and capitalize the expansion of your brand‚ and
  • Managerial Talent. Qualified franchisees serve as a ready source of dedicated and‚ presumably‚ well trained‚ managers and unit operators.

There are many aspects of franchising that make it a compelling business model. Franchising is not for everyone (a topic that I discuss and write about often) but for the right business and entrepreneur the benefits are compelling. In a future post I will focus on some of the negative factors or attributes that must be carefully examined before franchising.

So‚ when it comes to "franchising" there are never accidents – just hardworking entrepreneurs looking to expand their successful business and brands.

Continue reading about How to Franchise Your Business

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