When we think about expanding or growing our business, we often look at ways to grow revenues, through sales, promotions and customer incentives. Growth also comes in the form of expansion by adding different locations. This means more capital from the owner, hiring more staff and finding a trusted and reliable manger to operate the business.
For companies looking to grow their business, franchising should be considered as a viable option.
Franchising offers you the opportunity to grow your business faster with the investment of other people’s money.
Although franchising does not fit the bill for every business, it should be considered alongside traditional business growth methods. Some of these methods include organic growth, joint ventures and licensing.
Business owners should examine franchising as a method of growth if they are experiencing a lack of capital, people or time.
Lack of capital
Franchising enables companies to expand without the risk of debt or the cost of equity, because the franchisees provide the initial investment at the unit level. There is also a greater return on capital invested.
Business owners vs. Managers
Within a franchise, each store or unit is owned and operated by independent business owners. As a result, the franchisor is not concerned with the details of the day-to-day operation of each store.
Fewer staff needs to be employed by the head office because the franchisee is responsible for hiring and managing their own staff.
Furthermore, when the franchise is operated by highly motivated owners, the franchisees will be reaping the benefits of their own hard work.
On the other hand, an owner who expands by building other stores will have to hire managers to operate the stores. Managers are often not as invested in the business because they have no equity in the business.
Not Enough Time
The focused time and energy required to expand your business can be overwhelming.
Franchising allows for expansion without having putting in extra time. Looking for new sites, negotiating leases, securing funding , hiring and training staff is all a part of the process in preparing to expand your business.
In order to do this properly, it requires a lot of time and a team that will help you to execute it properly.
Franchising your business is an opportunity to grow quickly and thrive without taking on all the stress of expansion.
Are you ready to grow your business? Reach out and let me know your thoughts on expansion.