
We’ll start this article with personal experience from the last 15 years in the field, working with business owners who were either on the fence about franchising their businesses or completely against the idea of it and giving you the top three things that we’ve heard from business owners regarding why they believe they “shouldn’t franchise their business.” We cannot count the times we’ve heard these phrases from the mouths of business owners, and we’re going to tell you why we believe each of them to be unfounded fear rather than legitimate objection or concern. If you read this with an open mind, you may just be shocked to find your views on Franchising Vs. Corporate Growth shifting just a bit.
1.) “I don’t want to franchise my business because I will have to give up most of the profits that I would’ve made myself if I had simply grown the business corporately.”
Nothing could be further from the truth, but before we simply make that blanket statement, please allow us to explain why we believe this. Every business owner wants to continue to grow their business. We are in business to increase profits and create opportunity for others. We have our kids, our wives and husbands, our family and pets that we want to give the best quality of life possible to and then most of us have a vision to use our income and experience to benefit others within our communities and across the nation or the world. In order to do this all corporately, you must continuously expand using your own capital, private money, or bank capital. At the same time, you must hire people as managers to run your locations and those
individuals don’t have a vested interest in your business besides the prospect of a paycheck every two weeks or so. This is an extremely tough road to walk down, full of its own pitfalls, but since we do not discourage corporate growth, and in fact encourage it, as it’s great for not only the company but also helps in selling your franchises, we would ask that you consider this instead: What if you could continue to grow your company as large as you want to corporately while at the same time exploding its growth by utilizing other people’s money who volunteer to actively manage your locations and are also willing to bet their own capital next to yours in the belief that they will succeed? All of this while at the same time providing that franchisee with the opportunity to accomplish all of the goals for their family that you have for yours? You see, your corporate growth doesn’t have to stop when you start selling franchises. You can continue to open as many corporately owned locations as you would like, provided that they aren’t within the protected territories that you’ve assigned your franchisees and you’re operating within the boundaries of your franchise system. Furthermore, allowing people to buy into your franchise system adds huge influxes of capital to spur your corporate
growth on even further. When most consider this, they see that for their growing brand that a good balance of both corporate growth and franchisee growth may be for them. It’s not an either/or world; you don’t have to choose and you can have the best of both scenarios!
2.) “I don’t want to franchise my business because I am scared that someone will ruin my brand.”
That certainly seems like a valid concern right? Until you really think about it. Let’s discuss! Who do you think is more likely to “ruin your brand”? A manager who you hired after running an ad who has zero vested interest in your company and brand other than the hopes that
they will continue to receive a paycheck OR a franchisee who has invested
$40,000 - $500,000 of their own money to open their own company, utilizing your proven systems and processes and continues to reinvest thousands of dollars a month into marketing to increase their sales even further? Yes, a bad franchisee can damage your brand image just like a bad employee; however, we’ve found that with the proper screening and qualification process as a franchisor, proper franchise requirements and controls and proper training, the former is the far more likely candidate to do damage to your brand and simply not care about it as they move off to their next place of employment. Having people with a vested interest growing alongside you may be the safest of all ways to grow.
3.) “Franchising is complicated.”
Yes, you definitely would not want to try to franchise your business without the proper legal help. That being said, for experienced franchise attorneys, franchising your company becomes a very simple process including the yearly compliance requirements. As a business who wants to franchise, your best bet is to focus on what you do best by running your business and let the professionals who handle franchising paperwork on a daily basis handle the minutia for you while you focus on actually building the brand and selling franchises! The toughest part is the initial step but once that is complete, it should be smooth sailing from there!!!
Although these are the top three objections that we’ve heard throughout the years, when the numbers hit the paper, a few things are certain. Franchising is THE most successful business model on the planet. Over 90% of franchisees are still in business after the 5th year in business compared to less than 25% in a traditional business startup. Over 40% of all sales in the country go through a franchise location. Franchising allows you as a franchisor to explode your growth and brand recognition, afford more national and local advertising, provide more opportunity to more people and increase your income exponentially higher than you would’ve by going it alone. You will also find that your brand will evolve a lot faster by taking in great insights and ideas from your franchisees in the field. Innovation works much faster as a group and as such, so does growth if communication and implementation is managed well with new ideas and information shared by your franchisees. It really is like a having a team of business consultants on staff 24/7/365 that want absolutely nothing but to see your brand get better. If you have questions about whether your brand may be a good fit for franchising, feel free to contact us today by clicking Learn More at the bottom of the page and one of our team members will reach out to you to discuss! Here’s to your continued growth!!!
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