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1.  To Consumers


Franchising provides consumers with well-known, reliable, convenient name-brand products and services.

 

2.   To Companies
 

Companies need to grow to maximize sales and profits and to realize economies of scale and marketing efficiencies. Franchising provides companies with expansion capital, potential for high growth, dedicated local operators sharing the risks and costs, and better service to the customer.

 

3.  Individuals Desiring to Own Their Own Businesses


Changing economic, demographic, and social factors are encouraging people to own their own businesses. They seek to be free from the pressures of the corporate world, and control their own destinies.

WHY IS FRANCHISING SO POPULAR?

BENEFITS OF FRANCHISING

FOR THE FRANCHISOR:

 

These are some of the advantages of franchising.

 

  • Provides Expansion Capital - The franchisee makes the investment to open the branch unit.

 

  • Fast Growth - Franchising allows companies to grow quickly because the franchise buyer puts up the investment capital and provides "dedicated" management - thus freeing up the franchisor's time to open more units.

                                                                                                                            

  • Quality On-Site Management - Since the franchisee is more dedicated than a company employee, sales and profits will be higher, expenses will be lower, customer satisfaction will be greater, and quality standards will be maintained. Today, most franchisees are well-educated, experienced, former middle managers.

 

  • Fewer Day-to-Day Operating Headaches - The franchisee makes the day-to-day operating decisions. They take care of employee problems, hiring, firing, etc.

 

  • Less Corporate Overhead - Since the franchise owner takes care of the day-to-day operating responsibility, the parent company support structure for franchise units is smaller compared to company-owned units.

 

  • Faster Market Penetration - Franchising can allow a company to penetrate the market quickly.

 

  • Higher System-Wide Sales - Research has shown that individual unit sales increase when converted to a franchise system. Because the owner is on site, a typical franchise unit will have higher sales than a company-owned unit.

 

  • Captive Market For Products - Franchising can provide a dedicated captive market to manufacturers.

 

  • Financial Leverage - Franchising provides a way to cash in on your experience and knowledge by selling it to others.

 

  • Opens Up Regional/National Account Opportunities - Some businesses lend themselves to serving regional or national accounts, whereas a local independent couldn't service a national account.

ABOUT FRANCHISING

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