In my over three decades of experience as a franchise consultant, I am often asked “What makes one company a franchising success while another fails? Rarely is there a single reason for franchising success. Here, I will examine some keys to successful franchising.
When a person buys a franchise, he or she is purchasing someone else’s company name, method of doing business and learning curve.
For these assets, the Franchisor is paid money, usually an Initial Franchise Fee as well as on-going weekly or monthly royalties. Franchising success has been described as a classic win-win situation. Both the Franchisor and the Franchisee must thrive in order to achieve franchising success.
Keys To Successful Franchising:
Potential Earnings: One important element of franchising success is that the Franchisor must generate enough money from franchising to sustain its operations and growth. These funds typically come from the Initial Franchise Fee and on-going royalties or service fees. Other income can derive from the sale to Franchisees of products, services or equipment, international franchising rights, developing and leasing back real estate to Franchisees and offering financing to Franchisees. The Franchisor cannot achieve franchising success without generating adequate profits.
Faster Growth: No small business we know has sufficient financial and human resources to rapidly develop multiple markets simultaneously. Through franchising success, a company can expand into new areas utilizing the money, energy and manpower of its Franchisees.
Reduced Managerial Challenges: Finding and retaining qualified managers and staff is one of the most challenging issues in growing a business. Franchising success can create the most determined managers anywhere people who have invested their own money and energy into their own businesses.
- Far Lower Capital Requirements: With franchising success, most of the capital required to open new locations is provided by Franchisees.
- Reduced Operating Costs: It costs less by far to operate a franchising success than to run a similar number of company-owned locations.
- Combined Marketing Clout: Franchising success creates more locations. These locations can combine their marketing investment for heightened impact.
- Increased Buying Power: The more locations your franchise company has, the more efficiently you can buy the goods and services you need to operate for franchising success.
For the reasons listed above, many thousands of businesses in the U.S. have chosen franchising success as their preferred method of expansion.
Thinking About Developing a Franchise Support System?
NFA Franchise Consultants have the experience to help businesses franchise. Just watch and listen to some of our client case studies and video testimonials. We can HELP YOU and it doesn’t cost anything to call and talk to us!
So, if you are still asking the “should I franchise my business” question over and over with no clear direction, give us a call at (706) 356-5637, or contact us through our online form. We look forward to helping you take your business to the next level and beyond.