Franchising your business is a good idea
If you have a successful business then franchising might be the best option for expansion. At present, more than 1,000 companies in the UK are going for franchising for business growth. You could also opt for franchising, as it is a successful and proven methodology.
Advantages of franchising your business
Franchising is beneficial as it helps companies to establish more outlets or stores in the country within a few years. This is not possible through company-funded development. The resources which you need to open a franchise are far less than you require to open a company-owned store. The franchisee will invest in the business and you only have to implement a local marketing campaign. Thus, you can also go for multiple franchisees at a time, which is better than opening store after store.
By granting the licence, you are placing the store under the ownership of an individual who has knowledge about the market. The earnings depend on the performance of the franchisee.
Franchisees will also pay an initial investment to you and most of it will cover the cost which is involved in franchisee recruitment, training and launch support. The main incentive will be the ongoing management service fee, which is some percentage of the turnover. Although the revenue which is received is less than a privately owned company, by taking the franchise route you can cut overheads and can focus more on developing the business.
Thus, franchising is much more beneficial than opening a new store, as it is quicker and less risky.