14 Jun Is Franchising My Business A Good Option?
Every business owner wants their business to grow. They want the brand to expand and their revenue to increase, but this isn’t easy to achieve. Growth requires hard work and capital; and while business owners won’t hesitate to work hard, they won’t always be able to finance their venture. In such cases, franchising a business is a good option.
Aspects to Consider
Here are some reasons why you should consider it.
When you franchise your business, you give someone else the right to use your brand, products, techniques, and other aspects of your business at a different location. The franchisees will pay a fee that covers everything from commercial property rent to fixtures and signs.
Because of this, you can eliminate the most common risk that business owners have to take in exchange for growth, i.e., financial leverage. You don’t need to borrow money to grow your business and brand, when you franchise it; you raise the money instead.
One of the biggest hindrances to growth is location because one person can’t be in two places at the same time. For example, if you have an established brand name in Melbourne but want to expand to Sydney, you’ll have to fly between the two cities to keep everything on track.
That can be time-consuming and expensive but it can be easily avoided if you franchise your business. You won’t have to worry about employees, management, finance, and other such related problems. Your brand can be present in Melbourne and Sydney without much hassle for you.
Consider this; if one person is forced to clean the entire house, some rooms or corners might be missed, and the cleaning would be uneven. But if each individual family member cleans their own room, all areas would be cleaned well and thoroughly. This applies to a company as well. It’s very difficult to keep track of business operations across different locations so you might inevitably miss some locations and neglect a few stores.
That can compromise the quality of your business and have a negative impact on your reputation. A franchisee is motivated to get success and will maintain their business well, which would contribute to your overall reputation.
Dealing with employees is one of the most difficult aspects of running a business. You need to hire good ones, handle their salary payments, deal with absences and leaves, and tackle insurance. This can be a hassle and often causes untold amount of problems to a business owner.
It’s hard enough to deal with employees at one location; to do so across multiple locations can be a nightmare for small business owners. If you franchise your business, you won’t have to deal with employees and related issues.
Of course, there are some disadvantages to franchising, and it’ll be remiss of us if we don’t lay all cards on the table. If you franchise your business, you’ll have to:
- Share profits earned with the franchisee.
- Loss absolute control over your brand.
- Have to deal with uncooperative franchisees and risk your brand reputation.
Deal with disgruntled franchisees that don’t make enough profit.
In many cases, the trade-offs are worth it because franchising can give businesses the right push towards growth.
If you want to know more about the benefits of franchising or want some advice, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or email us at email@example.com. You can also fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435