What Are the Benefits of Franchising? | Franchising is big business in the United States. This is proven by the 8 million employed by the 759,200 franchise establishments in 2018. It’s growing rapidly and there are many reasons for why.
What is franchising? Franchising is when a company licenses the use of its brand, product, and processes to a separate business, which will then operate under the name of the larger company.
Read on to see some of the main benefits of franchising and why you should consider it for your own business.
The managers of each of the franchised units get chosen carefully and through a long and arduous interview process. Once chosen, they are motivated as business owners to grow the profits of their franchise unit.
Not only do bigger profits for the franchise mean bigger profits for them, but they also use this opportunity to grow and expand their own business skills. It’s a win-win situation for all involved.
You get motivated managers who wish to grow their franchise units, and they get the backing of a well-known and established brand behind them.
Reduced Capital Needs
Each franchise manager will fund their own franchise unit. They invest a certain amount of money into establishing their franchise unit, which gets decided beforehand by you when establishing the franchises.
This way, the capital that is needed to build and grow the franchise is distributed between many different people, rather than being solely focused upon you.
Increased Speed of Growth
As franchise units have their own individual managers/investors, a franchise has the potential to grow faster than an individual business might. Each franchise manager will take it upon themselves to grow the franchise unit.
You can focus entirely on getting more franchise managers in different parts of your state or country. If you end up getting a franchise outsourcer like sfdpros.net, then you will be able to grow even faster.
Limited Risks and Liability
As the risk is shared between many different franchise units and managers, it is diversified and limited. You don’t have to be the only one who faces liability in case your business goes wrong.
Every franchise manager owns their share of risk and liability reducing the burden upon you.
Build Customer Loyalty
The more franchises you can have established, the easier it will be to build customer loyalty. When your customers can access your franchise wherever they might be, they are more likely to become loyal to your brand.
Remember, familiarity might breed contempt in relationships, but it does quite the opposite in business. Why do you think there is a Starbucks at every corner of a major city in the United States? It’s not by chance.
The Benefits of Franchising Outweigh the Initial Effort
Now that you know the benefits of franchising, you might be wondering about how to franchise your own brand. It’s a complicated process and has a bit of an initial outlay in time, money, and effort. But it’s well worth it when you consider the myriad franchising benefits.
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