Do you want to grow your business? This second series of articles goes beyond the basic ‘sell more / charge more’ advice to explore your options for business growth. In my role as Editor for The Business Show and Business Startup, I have talked with literally thousands of business owners and entrepreneurs about what they really need to know, not what a business guru thinks they need to know. This series is the result. Today’s blog looks at how starting a franchise could be a low risk option.
Starting A Franchise
If you have an established business that could be scalable across more than one site, then offering a franchise is a lower risk alternative to opening another location yourself. Franchising your business could enable your brand to expand more quickly, benefit from the franchisees’ motivation and fresh energy, while spreading the financial risk across your franchisees.
Usually, they will pay you an initial fee, plus a percentage of their profits in return for the use of your company name and logo. Many franchise deals also include guidance and advice – or restrictions – to help the new franchise succeed with the benefit of your experience. This is the most popular franchise model, as it offers the franchisor additional income without relinquishing control of the brand they have worked so hard to build.
But this route isn’t suitable for people who like total control over every aspect of ‘their’ business – because it isn’t truly theirs anymore. Even though the franchisee must adhere to contractual obligations, they will be their own boss and they may make decisions that you won’t like. And if the new franchise fails, or offers poor service, that could reflect badly on your existing business.
That’s why it’s critical to find the right person to take on as a franchisee and decide how involved you want to be with the new site before you set pen to paper.
Next: Strategic Partnerships
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