Surely you have heard about a system of conducting business as a franchising. Today this theme is very popular. The essence of franchising is that the major company-franchiser provides for a fee (a fixed or percentage of revenue) their system of conducting business and their “brand” for partner companies so-called “franchisee”.
It should be noted that franchising carries a serious business benefits. So if you’re serious about expanding your business then franchising can interest you.
The first advantage of franchising
Your sales outlets will control more effective, professional and motivated people. How does this happen? When you recruit managers and staff, then to you will come the people who looking for a “job” not a business; this people aren’t so successful and initiative to start your own business. But when you sell a franchise, then to you will come the people who has already accumulated some capital, adjusted for conducting business, investing their hard-earned money in this business as you are interested in the success of the enterprise. In addition, franchisee can be very effectively optimizing running costs.
The second advantage of franchising
Franchising helps you save on the opening new sales outlets. If you open a new sales outlet, it is usually “cost a pretty penny” for your company. Acquisition of real estate, repair, installation of the necessary equipment, provision of stock of goods and materials there are all requires significant material investments. A franchising allows you to shift almost all these costs onto the shoulders of your franchisee. After all, at first, you get a lump sum payment from them when joying the network which can include all part of costs, at secondly, develop sales outlet they will have at their own expense.
Therefore, you can expand on unlimited territory almost without investing own money.
You no longer need to look for major investments, it is not necessary to take out loans for the opening of new sales outlets, all your costs are covered by franchisee.
This is especially important for young companies which is very important as soon as possible to take the largest share of the market prevent potential competitors take its first. And these are the young companies often faced with a lack of financing when investors in one voice say: “It’s too risky”. And in this case you get capital in small portions from different people, not just get from them capital, it is also transfer to their shoulders a large part of the financial risks. In addition, together with a capital you get more interested super motivated managers who will work even 24 hours a day, and, therefore, you freed from necessity of having own staff of “guards”.
The third advantage of franchising
Franchising provides a high level investment capital gain. Here everything is simple. Firstly,most of investment franchisee makes on his own expense, not your; secondly, you do not need to maintain a large staff of employees to test the franchisee and, accordingly, pay them a salary also did not need to; thirdly, franchisee, unlike employees, do not require constant additional investment from the side of companies; fourthly, franchisee is interested in the most efficient work of their outlets and according to studies have 20% revenue than outlets managed by employees.
If this advantages are exactly what you need, then use the franchising.
I wish you generous clients, hardworking employees and reliable partners!
