Franchise development can allow you to open 25 new business locations without having to pay for it yourself. Build out costs—No concern of yours. Equipment—Not your problem. Managers—Don’t worry about them either. Breaking it down further, could you imagine not having to hire, fire, retain or manage employees?
This is not far-fetched. This is franchising.
Franchising is a practical way to achieve not only rapid, but also profitable growth while retaining control and ownership. One location to a handful, a dozen, or a few hundred is certainly possible because franchisees put up all necessary investment capital, assume all risk and take on day-to-day operation activities.
Franchisors are compensated quite generously for allowing others access to their business operations and system. The franchise fee, or “entry to the ballgame” is only the first step to franchise entrepreneurship and includes the right to use the brand name and operating methods. Secondly, royalties ranging from 3% to 10% of gross sales can be expected for continuing advice, training and support.
One of the most noteworthy benefits of franchising is being able to utilize the economies of scale to further enhance purchasing power. A limited number of approved suppliers may be designated to establish a convenient, consistent and low cost source for products. It is much more cost effective to purchase equipment, supplies, insurance and advertising services as a network of franchisees, rather than each individual franchisee acquiring said services independently.
Quite simply – more buyers equals lower costs.
Lower costs equals higher returns.
