Franchise Your Business enables you to…
 Grow your business with minimal Capital Investment
Increase market penetration and geographical reach
Eliminate day-to-day occupancy costs, payroll and operating expenses which are put under the control of the Franchisee who has a real personal interest in controlling them
Reduce Head Office and Field management costs (far fewer people are needed to run a Franchised business)
Develop the business with less capital, compared with more traditional methods
Reduce, or eliminate, the need to surrender equity or borrow heavily in order to expand the business
Franchise Your Business and you can...
Capitalise on the value of your business name and know-how Obtain off-balance sheet financing of new/existing outlets and service points
Dramatically improve your return on Capital Employed
When you Franchise Your Business you enjoy additional income through...
An Initial Franchise Fee paid by a Franchisee for the right to the area or location, the use of the name, operating systems and support
A Mark-up on sale of products - where appropriate
An On-going Management Service Fee>
An On-Going Marketing Fee - where appropriate
Summary of Franchising Benefits
Franchising's primary benefit is risk minimisation. Starting a new business is risky. Most studies show that over 90 % fail within 3 years. The primary reason that the failure rate is so high is because the owners have to go through the learning curve of operating that specific type business. Franchising reduces that curve substantially.
Another reason to buy a franchise is that a franchise investment can be thoroughly researched before any significant expenditure is made. Existing franchisees offer a wealth of information about the business so that new franchisees can try the business on before they buy to make sure it's a good fit for them.
Franchisers sell a defined, proven business format or method of operation, offering a product or service that has sold successfully. An independent business is based on both an untried idea and operation. The experience of the franchiser's management team increases the potential for success. This experience is often conveyed through formal instruction and on-the-job training.
Franchisees can often buy lower-cost goods and supplies through the franchiser, resulting from the group purchasing power of all the franchises. Established franchisers offer national or regional name recognition - while this may not be true with a new franchiser, the benefit of starting with one is the potential to grow as its business and name recognition grow.
Franchising provides a uniform system of operation, so that consumers receive uniform quality, efficiently and cost-effectively. A uniform system brings with it the advantages of mass purchasing power, brand identification and customer loyalty, capitalising on the proven business format.
A franchiser also provides management assistance, including accounting procedures, personnel and facility management. An individual with experience in these areas may not be familiar with how to apply them in a new business. The franchiser helps a franchisee overcome this lack of experience.
Franchisors help franchisees develop a business plan. Many elements of the plan are standard operating procedures established by the franchisor. The most difficult part of a new business is its start-up, since even experienced managers lack the knowledge to set up a new business.
One of the biggest benefits to franchising is marketing. The franchiser can prepare and pay for the development of professional advertising campaigns. Regional or national marketing done by the franchiser benefits all franchisees. In addition, the franchiser can provide advice about how to develop effective marketing programs for a local area through a cooperative marketing fund, to which the franchisees contribute a percentage of their gross income.
It's possible to receive assistance in financing a new franchise through the franchiser, who often makes arrangements with a lending institution to lend money to a franchisee. The franchisee must still accept responsibility for the loan, but the franchiser's involvement usually increases the likelihood that a loan will be approved.
A franchiser also provides training for the franchisee. This is especially important if the concept is complex. The best training combines classroom or one-on-one training at the franchiser's facility with field training at the franchisee's place of business.
Finally, franchising has found a solid economic niche that caters to specialized needs. Many UK consumers for example no longer want an exhaust installed by a garage, a hamburger from a restaurant or a pizza from someone who won't deliver it within 30 minutes! Specialists, it seems, "do it better," and the franchise industry is only too willing help. |
