Why should I franchise my business?
That’s one of the most common questions we’re asked. The reasons are many, but here are the top 5.
Top 5 reasons to franchise your business
1. You’ll limit your risk. Your business grows and expands using the capital investments of your franchisees. You limit your liability with leases and personnel. Your franchisees take the risk and you reap the rewards with fast market penetration and low capital outlay on your part.
2. Enjoy franchisee fees and on-going royalties. Every time a new franchisee signs a franchise agreement you collect a franchise fee. Typically, these fees range from $20,000 to $40,000 or more. You also collect on-going royalties each week or month totaling 5% to 10% or more of gross unit volume. Royalties create a great income flow now and in the future.
3. Franchisees are more dedicated and motivated than employees you hire. Franchisees want their franchise to succeed. It’s as simple as that. You could open additional units, but you’d have to hire managers to run the business. The best interest of managers is not always the best interest for the business owner. Franchise owners have their own capital invested, and have built-in liability to concern themselves.
4. Franchises fail at a lower rate. With a proven business model, franchised business have shown success rates many times greater than Mom and Pop businesses. You’ve tested and proven your business model. Let others reap the rewards of success just as you have.
5. You retain control. Your Operations Manual is the bible of your business. You’ll layout and detail all the daily operational procedures that you have developed over the years. Your model has worked and you’ll expect your franchisees to follow that business model to the letter. You retain all the rights to your brand’s name, trademarks, and goodwill of the company.
Why franchise my business? Because it makes sense.