ADVANTAGES OF FRANCHISING
For Consumers
Consumers like to purchase products and services from familiar names with
reliable standards of service and quality. They like to deal with businesses where
the owner is on-premise.
The Franchise Company
Expansion Capitol - Franchisee makes the investment for a new brand, not you.
Rapid Growth - The franchise buyer provides "dedicated" management freeing
up the franchisor's time to open more units.
Strong On-Site Management - The franchisee has more dedication than a company
employee. Customer satisfaction is superior while maintaining quality standards.
You don’t have to deal with Day-to-Day Operations - The franchisee deals with
the everyday operations. They take care of employee problems, hiring, firing, etc.
Less Overhead - Since the franchise owner takes care of the daily operations,
the parent company’s structure for franchise units is smaller compared to company-owned
units.
Penetrate the Market at a Faster Pace – The more branches, the quicker your
brand reaches the public.
Larger Sales Numbers- Individual unit sales increase when converted to a franchise
system. Since the owner is on site, a typical franchise unit will have higher sales
than a company-owned unit. McDonald's® says, "We've discovered that the franchised
restaurants do better than the company owned."
Captive Market - A dedicated captive market to manufacturers.
Makes Some Money! - Cash in on your experience and knowledge by selling it
to others.
Global Account Opportunities - Vendors lend themselves to serving regional
or national accounts, whereas a local independent couldn't service a national account.
The Franchise Buyers
Decrease Risk - The U.S. Commerce Department estimates that 95% of franchises
succeed; only 25-35% of independent businesses succeed. Why the difference? Since
a franchise is usually a duplicate of an already successful business, it should
succeed.
Quick Startup - When a person buys a franchise he/she is getting start-up
support and is buying the "learning curve." As an alternative, if he were to start
a similar independent business it would take longer to achieve the sales volume
associated with buying a franchise. The trial and error stages have already been
done by the franchisor and as a result, profits and business equity are built faster.
Be Your Own Boss - Let a franchisee feel the pride and independence of owning
his/her own business.
Training - Training should help a franchisee avoid mistakes and generate more
volume and profits.
24/7 Support - Give a franchise owner quick access to help solving problems
and a feeling of not being alone.
Collective Buying Power – Reduces the costs of doing business.
Regional/National Marketing - A chain of operating units can afford to generate
far more exposure and advertising than can an independent.
Business Model Already Proven - Tested and proven systems save development
time, money and help prevent mistakes.
Trademarks – Protected brands and customer awareness of the franchise name
is a tremendous benefit.
Mutual Destiny - The success of the franchise owner is in the best interest
of the franchisor.