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FRANCHISING
ADVANTAGES?
Franchising is a business method that has greatly
enhanced the performance of many corporations
and small companies. It has enabled many companies
to expand rapidly and profitably, with good long-term
stability. And franchising is a format which is
adaptable to many different areas and types of
business.
Pace
Franchising can provide faster growth. A company
can often accelerate its growth by using a franchise
business format - rather than just adding branch
outlets as funds allow.
People
Franchise owners, more often than not, out-perform
branch managers. A franchisee not only has the
extra incentive of not having a limit on their
earning capacity, but they have invested money
for the franchise which needs to be protected,
thus ensuring continuing sharp focus.
Resources
The franchisees provide most of the money for
the expansion - much of which is paid in advance.
Franchising is a smart way to raise capital.
Systems
Franchisors usually have superior systems that
have been tested and proven giving franchisees
a flying start and a continuing advantage.
Lower Risk
It is the franchisee who provides the capital
and who owns the outlet, thereby bearing most
of the legal and operational risks.
Advertising &
Promotional Power
As a franchise chain expands its marketing budget
grows more powerful. This allows a franchise system
to get more value for their advertising dollar.
Buying Power
As the franchise system expands, quantity discounts
become larger providing individual franchisees
with the opportunity to buy better, to sell better,
and to profit.
Quality Control
Quality control is better because the franchisor
has the legal power to monitor franchise outlets
and to ensure that franchisees keep them up to
the prescribed standard.
A Solution to
Dealer Problems
Hard working, focused franchisees can replace
apathetic, under performing dealers or agents
who may also be marketing other products or services.
An Exit Strategy
Franchising can enhance the growth and profitability
potential of a business which often results in
a more saleable proposition for both franchisor
and franchisee.
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