The franchise business model offers quite a few benefits. That’s why so many people who are interested in becoming their own bosses/Owners mention it as one of the ideas they’re exploring.
Some of the more obvious benefits include proven business systems, training, support, purchasing power, and powerful technology. If you’re thinking hard about becoming your own boss, owning a franchise is worth a look.
But, there’s another benefit to franchising, and it’s rarely mentioned. It has to do with growing a business… and how a franchise business can be grown. It’s franchising’s hidden benefit.
You Won’t Have To Guess
Before you write a check for the franchise fee (the upfront fee you pay when you sign the franchise contract) you’ll know exactly how to grow your new business. You won’t have to guess. That’s franchising’s hidden benefit. I’ll explain.
Let’s say you’re buying a retail franchise like Flip Flop Shops.
Retail franchise growth opportunities involve adding additional locations… units.
As a matter of fact, you can come up with a growth strategy upfront.
In franchising, there’s something called a “development schedule.” It’s for franchisees that know they want to become multi-unit franchisees, and it’s included in their franchise contract. The development schedule includes a specific timetable stating when you’d be required to open the franchise units you’ve committed to. For example, the contract may call for you to open your 2nd franchise unit 18 months after the 1st one opens and your 3rd one 18 months after the 2nd one. In addition, you’d be required to pay the franchise fees for those units upfront. But, sometimes those franchise fees are discounted for people committing to multiple units. It depends on the franchisor.
Food franchises offer growth opportunities the same way. The Subway® franchises in your area may be owned by one franchisee. Multi-unit franchising is a popular option these days and it’s a great way to grow a franchise business.
Growing a Franchise That Has No Physical Location
Most of the people I’ve worked with over the years in my capacity as a franchise ownership advisor go into franchising with growth in mind. Very few have ever told me they’d be satisfied with a franchise business that brings in minimal revenue or that breaks even.
But, when it comes to the type of franchise business they say they want, a third of my clients tell me they aren’t interested in franchises that require retail space. The reason: Higher perceived risk.
It’s true; businesses that need a physical location to operate can be riskier to start and own, mostly because you have to sign a commercial lease. Some people just aren’t comfortable doing it. They tend to want to own a home-based business.
Growing a home-based franchise can only be done a couple ways.
The first way involves aggressive sales and marketing.
If you’re interested in becoming a successful owner of a home-based franchise, you’re going to have to be a real tiger. That means cold-calling prospective clients every day. It means taking advantage of your franchisor’s marketing system. It means coming up with some your own marketing ideas and implementing them. You’re going to have to keep your sales pipeline full.
Another way would be to add staff.
You could add a part-time virtual administrative assistant. Doing that would enable you to concentrate on increasing revenue…making sales.
If you really want to grow your home-based franchise business, you could add on additional salespeople. That’s how owner of executive coaching franchises (which are home-based) grow their businesses.
Franchise businesses come in all shapes and sizes.
All of them are growable.