Advantages and disadvantages of franchising your business
The benefits and potential drawbacks of using franchising to grow your business.
Franchising is an excellent way of expanding a business that is already successful. However, you should be aware that franchising is not suitable for every business.
Understanding the advantages and disadvantages of franchising will enable you to decide if franchising is a suitable option for your business expansion.
Advantages of franchising your business
Grow your business
Franchising your business can be a cost-effective way to grow your business. You will not have to cover the cost of investing in new premises or staff. Additional sales lead to additional profit and if you retain this in the business, in the long-term, you should have a saleable asset for your future.
Costs
Each franchisee finances their own franchise outlet. While the franchisee meets all the costs and collects the income, you receive franchise fees and royalties or a mark-up on products sold by the franchisee.
Easier management
he franchisees also run their businesses therefore reducing the management demands placed on you. The best franchisees will be highly motivated and have local expertise, making your life much easier.
Develop your brand
The more franchisees you have the better known your brand becomes. Your brand benefits from the capital investment of the franchisee.
Motivated franchisees
Franchisees are likely to be more motivated than a manager as they have a vested interest in the success of their business and therefore the success of your brand.
Purchasing power
A larger business is more secure and additional turnover and profit can provide access to better deals for office equipment, vehicles and other business purchases.
Ideas for future success
Franchisees can contribute fresh ideas for the future success of the brand maybe outlining opportunities that you might not have identified otherwise.
Support from others
Being a business owner can be isolating so having a franchise network can offer 91香蕉黄色视频 and advice.
Disadvantages of franchising your business
Not a fix for a failing business
Franchising is not a solution to provide injections of capital from other people when a business is in difficulty. You should only go down the franchise route if you already have a successful business up and running.
Costs
Franchising your business will involve significant financial investment at the outset to get a successful franchise model in place for future growth of the business including investment in preparing legal documents, operations manuals, marketing materials and recruitment.
Time
Franchising will take a lot of time investment especially when initially setting up the franchise model. You will also have to take the time to ensure you attract the right franchisees and control what they do.
Training and 91香蕉黄色视频
You will have to develop and deliver a suite of training and 91香蕉黄色视频 for your franchisees to successfully sell your brand. Businesses need to have systems and procedures in place that can be copied by most people to run a successful business.