What are the Benefits to Becoming a Franchisor?
(i) Cost-Effective Business Development. Unlike employees, your franchisees pay you to become a part of your business, and continue to pay you a percentage of their revenue. They also pay the costs of setting up the franchise and launching the business.
(ii) Simpler Management. The franchise network requires only a simplified and relatively low-cost management system. Franchisees run the day-to-day operations of their business units, which they must do strictly in accordance with your instructions.
(iii) Faster Expansion. The benefit of self-financing business units and a simplified management structure usually means that franchised networks can be expanded more quickly than company-run networks. By replicating a clear and successful business formula, your brand can quickly be expanded nationwide if you reasonably market at a national level.
(iv) Greater Commitment. Franchisees have invested in their business and know they can benefit directly from its success, and they are generally willing to commit to your brand for the long term.
(v) International Potential. If you have longer-term aspirations to expand your business internationally, you can quickly and simply replicate your franchise system in another country without the need to create subsidiary companies or branches overseas.
