What is franchising?
Franchising is a business practice in which a company licenses its successful business model to independent operators. The franchisor allows the franchisee to use the company’s name, logos, and business model, while also acting as a supplier. In exchange, the franchisee pays the franchisor an initial fee, as well as ongoing royalties.
Franchise vs. chain models
Obviously franchising isn’t the only way to expand your business-you could create a chain. Chain stores and restaurants are directly owned and operated by the original company, but in exchange for “keeping it in the family,” you will also bear the burden of investment, liability, and associated financial risk.
Franchising, on the other hand, allows you to expand both physically (more locations) and financially (thanks to licensing and royalty fees), while simultaneously minimizing your risk. Once you franchise a business, you can sit back and enjoy that extra revenue stream in addition to your profits from your original business.
The bottom line
Think of it this way: Let’s say your business has a 20% bottom line. You sell 4 franchises, each of which pays you a 5% royalty, for a total of 20% of the franchisees’ earnings. You’ve now doubled your bottom line with minimal financial risk on your part. Now imagine that extra income multiplied out over ten years! Clearly, starting a franchise business is a low-risk way to expand your business with the potential for high ROI. Here’s what one of our satisfied clients had to say:
“Tom and his team took a personal interest in my venture of franchising our waste hauling company. Tom demonstrated his expertise in this by not only helping me develop the legally needed documentation but also a plan to market my franchise opportunity. They were always responsive to my calls and provided the needed components ahead of schedule. Their participation made this process easier and faster than I had been told or expected. For anyone interested in franchising their business I can say, Tom can deliver the full package.” - Mike Griffin, Waste Services
If you are trying to decide whether or not to franchise your business, give us a call at 706-579-1518. At Franchise ASAP, we are experienced in franchise consulting and development, with the knowledge to walk you through the process from beginning to end.