When your small business begins to grow, it may be time to think about franchising. Franchising can help your business grow more quickly and it can help you expand into new markets and new regions. Before you dive in, though, make sure you’re aware of the following five reasons why franchising your small business could be right for you.
Why do people franchise their small businesses?
It is no secret that starting a new business can be a risky venture. Between staying up-to-date on local laws and meeting customer demand, entrepreneurs face a lot of challenges. One way small businesses get around some of these obstacles is by franchising their brand. Franchising allows small business owners with an established brand to sell and grow their company while remaining involved with its day-to-day operations. The decision can be complicated, however, which makes it difficult for small business owners to know if franchising would be right for them.
What are the benefits of franchising your small business?
Franchising allows you to develop a small business with an instant presence in the local market. This means that the management overhead is spread out, allowing the franchisor to focus on product development and innovation. There are many reasons why business owners decide to franchise their business below. We list the five main reasons why this option is very popular for small business owners.
1) You can expand without doing everything by yourself
Franchising allows you to expand your business without having to do everything yourself. This works by recruiting franchisees you as the small business owner looking to expand would be known as the franchisor of the business meaning you can assign and recruit franchisees to certain locations to set up shop without you having to run those locations on your own this way you would just oversee the operation and business growth over time.
2) When you franchise your business it has international potential
Franchising can expand your business into international markets. Whether you’re looking for a way to create new income streams, increase efficiency or strengthen brand recognition, franchising is a powerful tool that offers several advantages for business owners of all sizes. If you want your company name out there—and if you want it known globally—franchising may be an excellent route for expansion.
3) Franchising is a great way to expand faster
Franchising is a fast-track method of business growth. If you’re planning on growing your small business rapidly, franchising can be a far more efficient way of doing so than starting new locations from scratch. It eliminates much of the legwork and overhead you would have with opening an entirely new location, allowing you to get right down to what you do best: selling your products and services through your franchisees running the locations. Also, the marketing solution to recruit franchisees to your business is a lot easier than having to hire lots of staff for multiple locations when going it alone. The best way to recruit franchisees is by using popular online franchise directories which are websites that list franchises for sale.
4) Franchising your business is less expensive than expanding solo
One of a franchise’s biggest benefits is economies of scale. If you open a large operation, chances are your initial investment will be much lower than if you were to try going it alone. This is because you’ll likely pay for only one name, logo and marketing campaign instead of several. Franchising offers valuable resources: Good franchisors aren’t looking for people who will cut corners; they want franchisees who will adhere to their brand standards and care about quality. That means they’ll provide training, advice, marketing and other useful resources that can make your small business operations easier. Many franchises also offer a support network where franchisees in similar areas can connect with each other.
5) Increased purchasing power
The popularity of franchising has changed dramatically over time. What used to be a strategy for well-established brands looking to expand into new territories is now something many small businesses employ when they are just starting out. Franchising offers you an enormous pool of potential customers in an established market, which can help you make your mark on that market and boost your revenues. If you need proof, look no further than McDonald’s: as a global brand, it isn’t exactly hurting for sales or attention.
Would franchising be the right move for your business?
Franchising is a smart way to scale up your business. You’ll have a support system in place, which means you’ll be able to grow more quickly and with greater confidence. A professional franchise network also makes it easier for you to recruit franchisees because there will be an established name and image. To make sure franchising is a smart choice for your business, answer these five questions: 1) Is my company financially ready? 2) Are we operationally ready? 3) Do we have good leadership? 4) Do we understand our competition? 5) Do we have good margins? If you can say yes, then franchising might be a great option for your business to expand.
Where to get advice about franchising your small business?
There are many free and paid resources available to get advice about franchising your small business. For example, you could consider reading a free franchise magazine to give you more information about franchising and why it might be the best solution to grow your small business. However, if this is the first time you have considered franchising and are new and not sure how you can make this work for your business then consider talking to an experienced franchise consultant such as the team at Infinity Business Growth Network.
What’s Next? If you’re interested in becoming a franchisor, then I hope that by now, you have a good idea of what franchising is and why it might be right for your small business. But before getting started, keep in mind there are some important legal considerations you’ll need to make. First and foremost, there are a variety of laws specific to franchises and franchisees that must be taken into account when entering into an agreement. Making sure all parties—including yourself—are fully aware of your responsibilities, obligations and rights is essential. If you want to remove some of the stress of franchising your small business perhaps consider using an experienced franchise consultant as we mentioned above such as the team at Infinity Business Growth Network.