Pip Wilkins, CEO of the British Franchise Association, explains the benefits of franchising to scale your business
It’s only natural for entrepreneurs and business owners to think about the next stage of their company. They want to know how to move it forward and develop it further. Your business is your life and you want it to continue flourishing. Of course, franchising is a business concept that should be taken into consideration by anyone who feels like pushing their business to the next level. It can be applied to so many types of companies – on the road or working from home, looking after pets or running a cleaning service – as long as you have a proven business model, it can be franchised.
But if you remain unconvinced, these three perks to franchising a business could be the push you need to make franchising your future.
Taking on franchisees is an ideal way to expand your business without having to invest heavily. Why? Because the franchisee will provide their own capital towards the business investment for various aspects that would otherwise be your responsibility. This could be anything from staff to location, depending what has been set out in the business agreement. Once set up, the franchisee will be paying you a share of the profits. This creates a reciprocal relationship whereby you can impart all your expertise and best practices, explain where you went wrong in the past and work together to make the franchise a success. You all have a vested interest to make it work.
The franchisee will also be running the business as their own, leaving you to take care of other areas of the business and looking after the overall brand. This doesn’t mean they’re left on their own once they’ve invested: you must devote time and money to launch of the business and implement continuous support to ensure the franchisee isn’t overwhelmed. Still, if you want to expand quickly and minimise risk for everyone, franchising is a great option.
Local market infiltration
Franchisees get to have their own territory – usually an area they’re familiar with. This allows the business to have a face in the community rather than being another corporate site. They may also have local knowhow that you don’t. Franchisees are able to build their business around the local area and become more involved in the community. Having someone who has their own loyal customer base will be vital to a successful business.
When looking for someone to become a franchisee of your business you have to be very careful, selective and rigorous. Having a franchisee is completely different from having a manager at another location. Franchisees have a stake in your business and will always have to work hard in order to make it a success. Having a franchisee means they've invested heavily and intend to make this their own business, so when considering omeone to recruit, look for drive and ambition. Someone who is willing to invest a significant amount of money into a business will be willing to learn and adapt.
The future is franchising. Small, successful and independent businesses should seriously consider it to scale up brand awareness, size and reputation.