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Franchise


Reasons For Franchising Your Business

If you have heard about franchising and are wondering what the benefits might be for your business, here are seven good reasons for franchising your business.

Better Market Penetration

Franchisees are normally well established as part of the local community, either on a personal level or as a result of their past business activities. This can give them a very significant advantage in gaining new business for the franchise at a local level.

Faster Expansion

The benefit of self-financing business units and a simplified management structure as described above usually means that franchised networks can be expanded more quickly than company-run networks. Franchising is all about replicating a clear and successful business formula and, provided the franchisor is prepared to make a reasonable investment in marketing at national level, the brand can quickly be expanded nationwide.

Lower Cost

Franchisees make an initial payment in return for becoming a part of your business and then they continue to pay you a percentage of their revenue, throughout the duration of their Franchise Agreement. This means that the costs of setting up the franchise, training staff and launching the business are all covered by the franchisee rather than by the parent organisation. Similarly, once the business is up and running, it is the franchisee who will be rewarding you with a monthly income, rather than being paid by you as an employee. For these reasons, the franchise system can provide a very cost-effective route for business development, but only provided that the original business is successful and that the franchisor is willing to invest sufficient time and money into creating an attractive franchise opportunity.

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