Franchising: the Best Way to Expand Your Business

Business meeting about franchise

Most entrepreneurs never get to expand their business. Managing one brewery, diner, or storefront can already be difficult, so what more, adding a couple or more stores? However, franchising solves this issue — and many more — allowing business owners to expand without too much fuss.

Expanding without Capital

Branching out can require massive amounts of money. Renting another location, setting up the place, and paying staff require big investments that can put you in the red if you’re not careful. You’ll also have to deal with the legal requirements for establishing a branch of your business. Entrepreneurs who choose to franchise their business get to expand their brand without dishing out capital. In fact, franchisers receive money from franchisees for the privilege of carrying their brand.

Of course, you’ll also need to provide your franchise partners with some of your knowledge, logistical support, as well as the essentials to running your business. Aside from capital, you also won’t need to worry about additional managers for your franchise branches. Nobody makes a better manager than a franchisee who has his/her money on the line — so you can be sure they will try their hardest to succeed.

Building Brand Recognition


Brand recognition can mean the difference between a local operation and going national (or even international). Although the internet and social media can be buzzing with your brand, it wouldn’t make a difference if your potential customers/clients can’t access your business. Spreading your brand across multiple locations strengthens it, making it a more dominant figure in the market.

Of course, franchising your business can be difficult. Getting the first 1-4 franchisees can be difficult, but you can use the services of companies dedicated to franchise sales management. These companies work with your brand and offer it to a wider market of interested entrepreneurs while ensuring that only the right people can connect with your business.

Increasing Profits

Although you won’t be getting the majority revenue in a franchise (as you would if you expanded your business normally), you still get 4-12 percent of its revenue in royalties. While this may be a small sum compared to a branch that you yourself opened, you also won’t have to deal with overheads, staff training, and other management issues associated with running a business. Once you expand to 10 or more franchises, the money will keep pouring in with minimal effort, allowing you to expand with your own branches for further profits.

Of course, the bigger the revenue of a franchise, the more you get in royalties. It’s in your best interest that your franchise partners succeed, and you should make efforts to ensure they do so. Maintain clear lines of communication and try to reach out to each of your franchise partners for feedback every now and then. Pay close attention to your under-performing franchises and try to help them out as much as you are able since their success is also yours.

Franchising your brand is a great way to expand your business and increase brand recognition and visibility. It won’t cost you a penny, and it can bring in tons of revenue if you ensure your franchise partners’ success.

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