Why should I franchise my business?
Answered by Bill Lockett from Franchise Systems Group
Many people have considered franchising as a means to grow their business, but have not been sure what it entails.
Franchising is straightforward as long as you follow the steps carefully and do not attempt to take short cuts along the way. It does not matter whether it is a restaurant franchise, a food franchise, a coffee franchise, a car wash franchise, a real estate franchise
Why have some businesses followed the franchising route?
Advantages for franchisors
An entrepreneur can expand their business by setting up additional branches, marketing through independent outlets or by franchising independent operators.
The advantages that franchising offers include:
• Rapid penetration of the market.
• Being able to use franchise owners’ capital to grow a new client base.
• A financially committed franchise owner will do everything on their power to grow their business.
• Franchise owners will have a much better knowledge of trading conditions and have valuable networks in their local area.
• Consistency in the delivery of product or service.
• A branded network to increase exposure and market penetration.
• Economies of scale.
• Improved ability to compete with the “big boys”.
It is important for the success of the franchise system that the franchisor exercises very tight control over all the franchise owners. A franchise system can succeed only when franchise owners adhere to the strict requirements as to presentation and set up, work methods and products and services offered.
Benefits for franchise owners
It is generally thought that the risk of business failure is reduced by franchising. A franchise owner carrying on business with a recognised brand name and proven business system should be less likely to fail than an independent operator.
The advantages for a franchise owner include:
• The use of an existing reputation and brand name.
• Established business method developed by the franchisor.
• Proven systems, products or services.
• Site or territorial selection policies.
• Launch assistance, training and ongoing support.
• Marketing support.
• Ongoing research and new product development.
Franchising is straightforward as long as you follow the steps carefully and do not attempt to take short cuts along the way. It does not matter whether it is a restaurant franchise, a food franchise, a coffee franchise, a car wash franchise, a real estate franchise
Why have some businesses followed the franchising route?
Advantages for franchisors
An entrepreneur can expand their business by setting up additional branches, marketing through independent outlets or by franchising independent operators.
The advantages that franchising offers include:
• Rapid penetration of the market.
• Being able to use franchise owners’ capital to grow a new client base.
• A financially committed franchise owner will do everything on their power to grow their business.
• Franchise owners will have a much better knowledge of trading conditions and have valuable networks in their local area.
• Consistency in the delivery of product or service.
• A branded network to increase exposure and market penetration.
• Economies of scale.
• Improved ability to compete with the “big boys”.
It is important for the success of the franchise system that the franchisor exercises very tight control over all the franchise owners. A franchise system can succeed only when franchise owners adhere to the strict requirements as to presentation and set up, work methods and products and services offered.
Benefits for franchise owners
It is generally thought that the risk of business failure is reduced by franchising. A franchise owner carrying on business with a recognised brand name and proven business system should be less likely to fail than an independent operator.
The advantages for a franchise owner include:
• The use of an existing reputation and brand name.
• Established business method developed by the franchisor.
• Proven systems, products or services.
• Site or territorial selection policies.
• Launch assistance, training and ongoing support.
• Marketing support.
• Ongoing research and new product development.
About Bill Lockett
Bill Lockett is the Director at Franchise Systems Group. Bill Lockett has a strong retail background and joined Franchise Systems Group (FSG) after 40 years international experience in senior management positions with major retailers.
You should always check independently that an ask an expert answer published on Franchise Business applies to your particular circumstances.
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Contact Franchise Systems Group
Unit 19, 10 Gladstone Road,
Castle Hill
NSW 2154
Tel: 1300 658 311
Fax: 02 9899 8099
