Franchises continue to grow in leaps and bounds as more business owners franchise their businesses and more entrepreneurs choose to become a franchisee instead of opening an independent business.
If you are still unsure exactly what franchising is all about, here is a quick definition. Through franchising a business can grow by licensing their trademark and trade name to entrepreneurs who are looking to own their own business. The franchisor is the person or company who grants the license to a third party for conducting a business under their marks and the person who will sell the products and services of the franchisor is referred to as the franchisee. As part of the agreement, the franchisor provides the franchisee with a business model to follow as well as branding materials and ongoing support.
There are a lot of advantages to joining the franchise industry. Here are some reasons why franchises are good.
For the Franchisor
For the franchisor, the biggest advantage is that they get to expand their brand and grow revenue without having to do all the work on their own. When a business is doing really well, the next step is to open up new locations so more people will be aware of your quality products and services and to increase sales. You can do this on your own by opening up more locations on your own, but by starting a franchise program, you can have entrepreneurs pay you to use your name and products to start their own business.
While there is still work involved for you as a franchisor as you provide your franchisees with training and ongoing support, the franchisees will be charge of the daily running of their location not you. It allows you to grow your business in a more hands off approach.
While all this sounds great, it is important to remember that not every business is meant to be franchised. If your business model is not easily replicable and you don’t have a strong enough brand, franchising might not be the right decision. Franchises are not the answer for everyone.
To do it right, keep these tips in mind. Be clear on what rules and regulations you want your franchisees to follow. If you give them too much freedom, they may go in directions that can hurt your brand. Also don’t try to sell too many franchisees all at once. If you try to rush things to make money, you are not going to be able to stay on top of everything and things will start to slip. Having a robust training program is also very important. You don’t want to send your franchisees out there without the right skills and resources so make sure you do everything you can to help them be successful. Because remember, that their success is your success.
For the Franchisee
For the franchisee, there are a lot of advantages too, especially if you have never owned a business before. When you open an independent business, you are all on your own to do everything, site selection, layout and design of building, hiring staff, advertising and marketing etc. While you might be passionate about the products and services you want to provide, do you have all the business background you need as well.
As part of a franchisor program, you get help on all these aspects of running a business. The franchisor will provide you with training and a strong support structure to not only help you initially launch your business, but to grow your business. Most franchisors require you to take classes as well as to complete onsite training and they will provide you with manuals and systems to help you with your daily operations.
As a franchisee, you also get to take advantage of the franchisor’s brand recognition. Popular franchises like Chaps Pit Beef and Zac’s Burgers have a lot of brand power. This means you won’t have to build up a customer database from scratch because people will already know and love what you are selling.
The resources that are available to you as a franchisee are also phenomenal. You will have a network of mentors, not only the franchisor but also your fellow franchisees, to help guide you. Your franchisor will also be able to help you get any financial help you need more easily than if you were doing it on your own. Franchises already have pre-established relationships with banks and companies that you may need to work with that can help pave the way for you.
In addition, a national franchisor is in a better spot to spend money and manpower on innovation and technology and you will be able to take advantage of that.
The one big drawback to becoming a franchisee is that you don’t have complete control of your business. If you have your own unique product or service that you want to provide and keeping creative control is a must, then you are better off opening up your own independent business.
Why are franchises good? There are so many reasons. New franchises are popping up all over the place and Chaps Pit Beef is one of the best franchises to own. Chaps Pit Beef has developed a strong following for its unique take on BBQ and this has made it one of top 10 franchises to join. For more information, contact Chaps Pit Beef today.