This is a topic that comes up often for successful business owners and entrepreneurs looking to expand their business. In a recent video "The Advantages versus Disadvantages of Franchising" I discuss the following "Advantages of Franchising" that include:
- Expansion – Franchising is a business model that allows you to expand your business;
- Capital – Franchising affords you a ready source of capital. That is‚ franchisees invest their own money in expanding your business through the establishment of franchised locations; and
- Managerial Skill – Expansion requires management. And franchising offers a ready source of willing managers who will be your franchisees. Best of all‚ they will have a vested interest in the success of the business.
Some perceived "Disadvantages to Franchising" include:
- Regulation – Before you offer or sell a franchise‚ you must work with a franchise lawyer to prepare your FDD and satisfy franchise regulation; and
- Relationships – As a franchisor you will have "franchisee partners".
I go into more detail and you can learn more in my videos "The Advantages of Franchising" and "The Disadvantages of Franchising".