Do you feel tired of working 80 hours per week? You may feel that you are not progressing in your business. Consider franchising. Franchise development is a way to enjoy the benefits of running your own business, without the hassles. This article will discuss how to franchise a business. Let’s get started!
What is a franchise business?
According to the Federal Trade Commission, a franchise model is a business in which a company or individual (the franchisor), licenses its trademark and know-how (the trade name) to another party (the Franchisee) for a fee.
Franchisees typically agree to follow the franchisor’s operating procedures and guidelines, including using marketing materials and management systems.
It is important that franchisors maintain good business relationships with their franchisees, and provide them with excellent support.
- READ MORE: See our Franchise Guide
Franchise Your Business: Advantages and disadvantages
Existing businesses can franchise themselves to expand their operations without starting from scratch. Let’s look at some of the pros and cons franchise owners have to deal with before you make a decision.
Franchise Pros:
- Fast expansion. Your business can grow quickly and cheaply. You can do this because someone else already has infrastructure to support your business system.
- Less risk. It is less risky to franchise your business rather than start a new location from scratch. The franchisee assumes most of the risks associated with the establishment and operation of a new business.
- Motivated franchisees. Franchisees who are interested in a franchise have an incentive to succeed because of the financial investment they make. Because they do not want to lose their investment, and because they want to become a success story in the franchise industry, prospective franchisees are more likely to adhere to your operating procedures and guideline.
- Revenue increases. A well-run franchise system can generate more sales and a constant stream of revenue for the franchisor. It can help to build brand recognition and customer loyalty.
- Create equity. You can build equity by franchising your business. You own both the brand and system. You also get a portion of the franchisees’ revenue as a franchisor.
