Less Investment Capital
Franchising your business allows you to leverage the capital investment of your individual franchisees to open new locations. In addition to the franchise fee paid to you as the franchisor, your franchisees are responsible for the initial build out costs, lease, labor, taxes, insurance, etc. In most cases, a franchisor will recoup their initial franchising investment through the sale of their first two or three locations. Additional franchise sales will allow you to continue to reinvest into the franchise for continued growth.
Rapid Expansion and Market Dominance
We work with successful business models and put the time in at the start to ensure a successful franchise model for the long term. Once these details are completed and workable, franchising allows you to sell and open multiple units simultaneously to quickly gain market share and brand recognition. Your competitors will be left scratching their heads and choking in your dust trail.
Motivated Management and More Profitability
Any new business requires a great deal of time and effort to become successful. Rather than the traditional tedious hiring and possible turnover of management for each of your locations, franchising ensures the quality of your management team through motivated “business owners.” A business owner is generally much more motivated than an employee to perform well because of the capital they have invested and their potential for positive cash flow. With their own capital at risk, performance goes up and so does profitability.
Greater Buying Power
Buying products and services in mass quantities allows a franchisor to negotiate volume discounts from vendor and suppliers. These savings can be shared with your franchisees, allowing the franchisor to make money and their franchisees to enjoy the savings benefits. This provides an additional stream of income for the franchisor, while allowing the franchisee to have a competitive advantage over their competitors or doing business outside the franchise system.
Brand Recognition, Marketing and Advertising
There is a collective power within a franchise network to gain recognition on a national or global scale. Consumers like frequenting businesses they recognize and customer loyalty to brands is at an all-time high. For the independent business person, this level of marketing and brand recognition is not financially feasible and is very time consuming. Franchisees may be required to contribute a small percentage of their gross sales to an advertising fund, enabling the franchisor to advertise in regional, national or international media for the benefit of the franchise network.
Additional Revenue Streams
In addition to franchise fees and royalties, those who attempt to franchise their businesses without the experience of a franchise developer often overlook the multiple additional streams of revenue provided by the franchise model, including:
- Services Provided to Franchisees
- Sales of Products & Supplies
- Ongoing Training Fees
- Marketing Administrative Fees
- Sales of Promotional Items
- Rebates from Suppliers