Franchising is big business. (See Franchising Industry facts and statistics.) Studies show that 95 per cent of franchised business are successful, compared to only 55 per cent of non-franchised businesses.
Franchised businesses are tried, tested and evolving business concepts. That’s why banks love them. There’s much less of a risk involved in lending money to people to buy into them. Franchising provides you, the Franchisor, with the ability to expand your business much more speedily and with less of a financial risk than if you were to invest in, or raise the capital, to open new outlets yourself.
Franchising gives you a brand that will be chosen over other products and services that might have the same function and possibly the same quality. Behind the consumer psychology of it all, people will go for a brand they know and trust when there’s a choice between similar products or services.
Your profits are higher because your costs are substantially lower than they would be if you owned and operated all the outlets. You can use the franchisees’ contributions to a general marketing and advertising fund to promote your business nationwide. You and your franchisees can use your combined muscle to achieve greater purchasing power with key suppliers, enabling franchisees to compete on price with single unit operators.
Don’t forget the psychological benefits of franchising. You help others realise their dreams of financial independence by showing them how to set up and operate the business you conceived. In return, you’ll work with motivated business owners-people who will contribute creative, innovative ideas to take the business to a different level.