What Makes Franchising the Ideal Business Expansion Strategy

When considering the growth strategy of some of the biggest retail giants, hoteliers, or restaurateurs, franchising has always been one of the most feasible options. For businesses with a limited budget yet a well-defined vision, franchising is an absolute profit-driven mode of growth and expansion that can help you gain substantial returns within a short period of time.

From cash-flow benefits, cost-efficient bulk ordering to economies of scale, it allows you to explore a wide range of advantages. Now here’s a brief on what are the elements of setting a growth-oriented franchised business to help you figure out ‘how to franchise my business’.

• A well-defined, trading brand and name.
• Sufficient amount of profit that can support both the franchisor and franchisees.
• A clear and tested format that’s easily reproducible.
• A culture where all the roles and responsibilities are being clearly stated.

Before you straight jump into the venture of transforming your successful business into a franchise, you must ensure that all these elements can be developed for establishing a profitable franchising chain of business. To do so, it’s always best to seek professional advice from experienced consultants who have a fair deal of knowledge on the various types of complexities involved or the ideal steps to franchise an existing business model.

Not much capital intensive compared to other modes

Bank loans, borrowings from leasing companies, private investors, and friends are some of the reasons why business owners mostly got into the trouble of owing huge amount of debt. To avoid incurring such liabilities, you can consider franchising which helps you maintain control on your debts by collecting sufficient funds from prospective franchisees in the form of royalty fees and more. Though, there are other potential costs in case of franchising including business planning and marketing, supporting costs and training along with the cost of recruiting staff for managing the tasks in newly opened franchised units, it is considered to be comparatively less capital intensive.

Not just a manager but an ambitious investor

In case of operating a branch of your existing business, you need to hire a manager who will be simply performing all the duties and responsibilities as set by you. On the contrary, in case of a franchising business, the franchisee who is supposed to operate a newly-opened franchised unit has his hard earned money on rolling and hence, would be much more committed and motivated to do all the tasks at his best. Doing so will actually help him in achieving higher profits and get the optimum from his investment.

Time-efficient way to grow with minimised risks

Franchising is a growth expansion strategy that allows entrepreneurs to grow and secure their market position much quicker compared to opening and running a separate branch on your own. This is the reason why successful business owners often choose to opt for franchising their businesses when planning to expand their operational periphery.

Final thoughts

Franchising further allows franchisors to lessen the burden of responsibilities of establishing the franchised unit by delegating such to the franchisee. Doing so allows them to think of the broader picture when it comes to planning the next big move of the business including growth strategies, business policies and culture, and much more. Now, considering all the pros of franchising your business if you’re thinking of ‘how to franchise my business’, then seek specialised guidance of highly qualified consultants who have the right level of expertise and knowledge to make things work in the right manner and help you succeed as a franchisor.