The concept of franchising, whereby a business owner passes responsibility of a business arm to someone else, has been around for centuries.
Since the days of English noblemen and Crown land, people have been entrusting their fortunes to entrepreneurs seeking a slice of the action.
This happens for good reason, as there can be significant benefits for both sides of the deal.
Franchisees — those who take responsibility of a store or business arm — are given their own established business to manage and profit from. This removes the lengthy process of establishing a business from the ground up and removes the risk of such a process.
Franchisors — who own the enterprise and hand out the responsibility — can palm off some of the time and effort required to run a business arm, while still receiving some of the profits.
Of course, this all makes it sound a lot easier than it is. In reality, franchising takes a great deal of organisation, trust, and communication.
Without these traits, a franchise can lose face and profits as its range of stores crumbles around it.
One way to ensure this doesn’t happen is with effective franchise marketing. Fortunately for franchisees and franchisors, Admosis specialises in this niche and can help to avoid the crumbling of the empires described above.
Make sure to get in touch with our team for comprehensive guidance if you’re considering franchising as a growth strategy or simply want to learn more about this popular business approach.
The Benefits of Franchising
By franchising and effectively leasing out a business arm, you can raise funds remarkably quickly. Potential franchisees will bring their own cash to buy in and it’s up to you how you spend these newfound funds.
This is a great, low-risk way to grow a business as you don’t have to put as much money where your mouth is.
On the topic of risk management, diversification is another benefit of franchising. You get all the benefits of opening a new store with less risk of failure. You reduce the reliance on any one source of income and can test out different strategies at different stores.
Brand recognition is another great benefit of franchising as you expand your business into new markets. Simply by opening a new store in a new area your business can grow its recognition, so long as your franchisee knows their way around a brand awareness campaign.
Pitfalls to Avoid
Of course, as with any business expansion, there are risks involved that franchisors should be aware of.
The first is losing control of a given store as the franchisee becomes more ambitious. This disconnection can be easily avoided with clearcut communication and established guidelines from the beginning of the partnership. A watertight contract wouldn’t hurt your chances either.
A financial loss is another pitfall that will become clear as you begin franchising. While the franchisee will bring their own funding to the table, you will still need to invest significant capital to get things off the ground. Once again, with proper planning and communication, you can avoid any risk of financial loss.
Properly training your staff is a vital part of starting a franchise, otherwise, you increase the risk of both pitfalls mentioned above. Untrained staff can risk losing you money through poor customer service and business management, while they’ll also be more likely to stray from any official guidelines.
Contact Admosis
Speaking of guidelines, our team loves to develop clear marketing assets for franchises that are seeking to expand. Get in touch and watch your enterprise grow from being better to the best!
