If you are considering expanding your small business through franchising, it can be a very exciting time. There are many advantages to the franchise model, which will expand your brand to a wider audience, with new talent, and use other people’s capital. Franchising also minimizes the risks of your growth model, but care needs to be taken while developing the plan to enhance those benefits while also avoiding the risks that come with each of them.
Access to Better Talent
Most top-caliber, entrepreneurial people are more likely to join a business where they are expected to work hard and be accountable than they are a salaried position working for somebody else. Franchising allows you to attract and retain that talented pool of people, who tend to be more self-motivated when it comes to creating new ideas, executing a successful plan, and delivering results.
However, one downside to franchising is the loss of total control at each location, as each is now independently owned and operated, which can result in a lack of consistent standards. When developing your franchise strategy, it is important to maintain a strong set of best practices and required standards so that each operator delivers on the brand promise in each location.
Low-Cost Source of Expansion Capital
With the franchise model, each new franchisee invests their own money into each location. That creates an internal, reliable and low-cost capital stream for your business as it expands into new locations, especially compared to bank loans and venture capital partners. With the right franchise model, your capital outlay is small in new locations but will receive a high return on investment from royalties over an extended period of time, thus creating an annuity stream that allows both franchisee and franchisor to be successful.
When adding territories and new franchisees, you will want to make sure each location is well researched and each franchisee is carefully selected, as having the right franchise partners in the right spots will be a key to early success. Make bad decisions early in the process for the sake of growth, and it will cost your franchise in the long run with poorly run locations and negative franchisee validation.
Growing Your Brand
With the right franchisees and a strong business model, a franchise system is capable of carrying your brand longer and further than you can as a solitary entrepreneur. In this digital age, buzz and brand awareness are two crucial keys to success, and as your franchisees expand into new territories, more customers are likely to be eagerly waiting for your brand’s arrival.
Winmark Franchise Partners is here to help you get started and set you up for long-term success. Franchising is an amazing opportunity for business owners who want to grow and expand further than they thought was possible. Let us put our knowledge and experience on your side so you can move forward with your goals.
Contact us today at (844) 452-4600 to get started.