Why does a franchisor franchise?
Good question: why does a franchisor franchise, rather than expand through their own outlets, employing their own staff?
I have thought about this several times before, in previous lives, deciding on which is the best route to expand a brand and business. Having been in the franchise industry for nearly 30 years now, I suppose franchising is in my blood and believe it's a great way to expand.
There is no one concrete answer that fits all businesses. It is actually quite a complex, multi-faceted answer that has priorities and reasons in different guises for different businesses.
So, let’s take a few of these in turn…
Speed of brand expansion:
The rate of expansion will probably be quicker through a franchised model, than an internal investment model. Once the franchise has been established, a franchisor can launch multiple businesses, over a considerable geography, simultaneously. The key word here is “established”. I don’t mean 3 or 4 franchised outlets having previously been launched; I mean multiples of ten.
It is imperative, if a franchisor is going to do things correctly, that there is a stepped proven process for franchisees to follow. Get that right though and it is a great route to expand quickly, properly and consistently.