Have you ever thought of franchising your business?
If you said YES! Then you could become a global brand like Coca-Cola.
Did you know the current practice of franchising began with Coca-Cola?
Coca-Cola, which was first made in 1888, licensed its products to businesses (aka franchisees) to mix, bottle, and sell their refreshing sugary beverages in drugstore and later restaurants. This method was called “Coca-Cola Capitalism”.
Coca-Cola is now valued at approximately $188 billion dollars.
There are benefits to #franchising your business.
It worked for Coca-Cola, so here are 10 reasons to consider franchising your business.
1. Capital– In franchising, capital is provided by the franchisee. The biggest reason many companies have problems with expansion is due to the fact that they don’t have enough money. Expansion is very capital intensive. Therefore in franchising, that responsibility is on the franchisee.
2. Faster Growth: Coca-Cola’s best-known slogan and song was “I’d Like to Buy the World a Coke”. With franchising it is possible to grow faster since there is less cost involved for the franchisor. As a result, the company can set up new units very quickly, and be known worldwide.
3. Fewer Staff: The corporate head office will need to employ fewer staff because staffing each new unit will be the franchisee responsibility.
4. Wider range/more secure units for products and services– Franchising provides a wider range for a variety of products. Based on the region, you can introduce products that align with that area. You can also test out new products locally before you take it nationwide.
5. Day to day Operations– If you are more concerned with the big picture of running a business, such as growth and potentially global expansion then franchising is right for you.
Running the day-to-day business includes but is not limited to;
• Hiring new employees
• Training employees on systems and processes
• Managing customer service issues
• Firing employees when necessary
With franchising you can work in your areas of strength.
6. Highly Motivated owners: The benefit of franchising is that highly motivated owners operate the business. They have chosen the franchise they would like to buy with their own investment, so they are extremely motivated to succeed. In the end the franchisee reaps the benefits of their hard work.
7. Local Knowledge and contacts – Franchisees are often local business owners who understand what the area needs and what works in the community and what doesn’t.
8. Geographical Diversification – Your grandmother would remind you not to “put all your eggs in one basket”. This advice works both for investment and for franchising.
Franchising allows you the opportunity to diversify across your city, state, province or country. This diversification can balance out your revenues during tough times.
9. National Customers – Once you develop a mature franchise network, you are able to serve customers over the world. This is a major benefit of franchising.
10. Greater Return: You will see greater return on any capital that you invest in your business. With a large network you can see a bigger return in your business.
There is no pre-defined type or size of business that could or should franchise. All that matters is that a business that looks to franchise has a proven and replicable business model, which is profitable, and provides a win-win relationship between franchisor and franchisee.
Of the top ten on the list, which one would make you franchise your business?