If you operate a business which is situated in a particular area to meet local needs and you believe that similar businesses can be operated in other areas, then franchising is certainly a way forward. The alternative to franchising is to do it yourself with your own employees and your own capital. The challenge with that is that you will rely, in remote locations, on employees who do not, have the same level of motivation as franchisees who own their own business and who have invested their own money into their franchise business.
Further, franchisees have to fund the acquisition of their franchise business themselves by purchasing equipment, vehicles, taking on leases and paying the franchisor an up-front franchise fee. Expansion using franchising does not, therefore, require access to a substantial amount of capital by the franchisor. Having said that, launching a franchise business and doing it properly, is not without costs. Having incurred those initial costs, however, the franchise system can then be rolled out at no cost to the franchisor other than those costs which are reimbursed by a franchisee.
Clearly, all is not plain sailing with franchising because franchisees cannot be told what to do – unlike employees – and there is a real skill in trying to ensure that franchisees do the right thing and operate the franchisor’s system properly. If you have that skill, a great system, products or services which consumers want and pick only good candidates, franchising will enable you to grow your business quickly and economically.