Top 5 Benefits of Franchising a Business
When making the decision of whether or not to franchising a business it is important to evaluate the value and benefits franchising can have for your business.
The top 5 benefits of franchising a business include:
- Further expand your brand geographically – Franchising a business is a great way to reach geographical areas that you yourself may not have been able to reach alone. Franchising your business in different states and having franchisees open up their own locations within those states is a great way to get your business in a wide variety of geographical areas.
- Create additional exposure – The more locations your business is in the more visibility your business will get. Franchising a business is a great way to allow your brand to be exposed with each new franchise location that is opened.
- Funding expansion – When franchising a business a franchisor generally requires new franchisees to pay an initial franchise fee. In addition to the initial franchise fees‚ a franchisor also collects recurring fees which the franchisee is required to pay. This money can be used to reinvest in the brand and better services for both the franchisor and the franchisee.
- Group idea creation – Having franchisees can be beneficial for idea creating. Speaking with franchisees on a regular basis can give the franchisor a different and fresh perspective and can result in new ideas that will ultimately better the franchise.
- Individual location success – Often times since franchisees have invested (and continue to invest) their own money into their franchise location and the franchise brand they are more prone to upholding their presence at their location in a better manner than someone who is hired would. They have more to lose (their own money) so they put more effort into making sure their customers are having a good experience with the brand.
One thing to keep in mind when considering franchising is it is not right for every business. It is important to figure out if your business would be best expanding by franchising‚ licensing‚ or other methods.
Category: Start a Franchise