Help to influence growth for yourself and others in a BIG way. Franchising can be confusing and for some they may think that franchising only applies to restaurants (which is not the case). We’ve put together some facts about franchising that you might find helpful. So as you are thinking about expanding OR when you talk with a business owner who is thinking about wanting to expand, you can share these nuggets of facts about franchising!
Optimistic future. As a whole, the franchising industry expanded in 2017, following a year of solid growth in 2016. And franchising is poised for even stronger growth in 2018. Economics aside, in the franchising industry, the success of a whole franchise system relies on the success of its franchisees (check out our article on how to help franchisees be successful). So the motivation and support from the franchisor (and from other franchisees), keeps all operators focused and optimistic.
Franchising boosts the economy. According to projections, by the end of 2018 the franchise industry’s nearly 760,000 franchise establishments will employ 8.2 million Americans. Franchising will boast revenues just short of $760 billion. And that’s across all industries (such as service businesses, professional businesses, retail businesses, etc.) NOT just restaurants. This is all according to a study done by IHS Economics. Wow! Now that’s impressive!
Successful franchising companies adopt a “servant” mentality. One of the most successful franchises, 7-Eleven, has a corporate culture based on “servant leadership,” according to Joseph DePinto, the company’s CEO. DePinto said this means “leading with influence, versus leading with power”. In this business model, CEOs don’t reside at the top of the pyramid, but rather at the bottom, where they serve the customers who occupy the most exalted position.
Everyone is an entrepreneur. Some define an entrepreneur as someone who starts a business. In the franchise community, franchisors and franchisees would all consider themselves entrepreneurs. The franchisor took the first steps to build, support and lead the system; yet the franchisees are out every day on the front lines. They know what works and what doesn’t. Both work in unison to achieve the same goal and, if executed correctly, can become a powerful force in the marketplace.
Never stop innovating. The definition of insanity is doing the same thing again and again, and expecting different results. Time to break the cycle. Franchise systems must remain current and meet the changing needs of their consumers (more on keeping a brand fresh and current when franchising). Within a successful franchise system, innovation comes from the franchisees just as easily as it comes from the franchisor. Never squash creativity; encourage it!
Franchising leads to branding. All franchisees in a franchise system will be required to offer the same services and/or products thus creating consistency (learn about business format franchising and what it means when it comes to fostering consistency and uniformity). As more franchisees come on board in different areas, it will eventually lead to branding. Soon the business becomes recognizable and commonplace (a household name). Typically this will happen quicker than if the business owner continued to expand on their own.
Franchisors and franchisees have an independent relationship. In no way is the franchisee an employee of the franchisor (see more on the relationship between the franchisor and franchisee). In fact, the franchisee operates their business entirely independent of the franchisor and the franchisee is responsible for all day-to-day operations. It is the responsibility of the franchisee to operate the business adhering to the best practices developed by the franchisor.
Some have said that franchising is the catalyst to economic growth and in many ways we are seeing examples unfold each day. Call us at 1-877-615-5177 or send us your contact information and we will be happy to share with you other facts about franchising and determine if franchising may be the solution to your desire for growth.
