Each day you pour your heart and soul into your business. You work hard to be the best, providing superior service and great products resulting in happy, loyal customers and/or clients. If you are like most business owners, the payoff for all your sweat equity is not just simply in revenues, but in the flow of business that continues to grow because you have created loyalty and slowly you begin to realize that alone is powerful. It’s time to expand, now it is time to look at franchising. So you ask, what do I get out of franchising my business? What does franchising do for me that corporate expansion doesn’t? What do I get out of it?
Money
Have you ever said to yourself, “I’ve been advising people all along, helping them to open their businesses. It’s time I get paid for it!”?
Franchise Fee: When you franchise, you will receive a one-time franchise fee from each franchisee. What else does a franchise fee cover? By definition the franchise fee is reimbursement to you for the deliverables you provide a franchisee when they join your system (more on the franchise fee).
Royalties: Royalties are an ongoing fee that your future franchisee pays to you. This fee is usually a percentage of your franchisee’s gross revenues, however sometimes it can be a flat fee. Franchisees pay royalties for several reasons, to name a few:
1. The continued use and protection of your name, methods and techniques to operate your business;
2. The ongoing ability for your franchisees to tap into the vendors and suppliers that you have and continue to develop (buying power); and,
3. Ongoing training, mentorship, support, product development and research that ultimately makes your brand stronger.
When determining a royalty fee, it really depends on a few factors (learn how royalties are determined).
Growth
By far the best way to expand into other markets is to open up more company-owned locations. However, most business owners (like you) are not funded, cannot open locations fast enough and do NOT want the headaches of more employees (check out our article on this topic). Franchisees are business owners who take on ALL the responsibilities of operating your business in their area. As a result you grow faster which makes branding your business easier.
Loyalty
Imagine that you have shown a complete stranger how to do what you’ve done, and they become as enthusiastic about your business as you are. Your goal is for every franchisee in your system to be happy and successful (read how to help franchisees be successful). A measure of success in franchising is how well others are doing operating your business on their own. After all, the quicker they succeed, the faster your system grows.
And in some cases your franchisees begin purchasing additional franchises. Whether franchisees become multi-unit operators or not, once they start to taste success, their loyalty to you and your system is immense. And that becomes contagious!
Call us directly at 1-877-615-5177 or simply send us your contact information. We will be happy to talk with you about how powerful franchising can be and everything you get out of franchising your business.
