Franchising - The #1 Way to Expand your Business - Francorp Partner Kent Boxberger

Business Insight
FRANCHISING – The #1 Way To Expand Your Business
by Kent Boxberger

I was talking with a client of mine the other day, who has 2 company owned locations in the home services business, and he asked me how to grow his business without borrowing lots of money from his bank and hiring more employees. I told him that most businesses who want to grow successfully, have to find extra money and then fund themselves into their growth, to make enough profit to service the debt, which on average takes 2-3 years to turn a profit on the expansion. His next question was, “How can we do it quicker than 2 or 3 years?” The answer is Franchising.
In today’s business climate, companies are looking for more ways to expand their sales and operations. It takes more money and more people. Franchising your business, solves both of those challenges. By franchising your business, you solve the problem of borrowing or using your own money, by partnering with others who invest their money in your business model. Secondly, you solve the personnel problem, because your partner (franchisee) hires and manages the staff to run the business. Picture for a moment, your business having 50 or more locations. Can you fund those locations and employ all those people? In addition, how long do you think it will take to establish those 50 locations? Even if you can, still there’s the risk, red tape and time involved in running the operations successfully. Franchising makes having those 50 locations a much easier task. You don’t fund those locations yourself, nor do you manage and hire the employees, plus the time establishing those 50 locations, is greatly reduced and accomplished with much more ease.
What types of businesses are candidates for Franchising? There are literally thousands of businesses that are franchised and growing. Historically, we think of fast food businesses like McDonald’s, Burger King etc., however, restaurants is only a small percentage of the types of businesses that franchise. Companies such as H&R Block, Ace Hardware, John Deere, Payless Car Rentals, as well as services businesses in the healthcare, medical, advertising, education, high tech, automotive, data processing, financing, real estate, business services and home services arena’s, have also franchised successfully.
To Franchise your business, there are typically only a few requirements to get started. The concept of franchising, is about taking a proven business model that is profitable and duplicating that model successfully. Start-up businesses are not candidates for franchising, due to the fact that there is no financial concept that is proven, nor any history of success. People who buy businesses are looking for a proven system of success that they may invest in, thereby eliminating most of the flaws, risks, mistakes and learning curve that comes with starting a business from scratch. This becomes increasingly important when you consider that according to government statistics, 95% of all start-up businesses in this country fail. This pales in comparison to franchises, which have a 70% record of success.
From an investment standpoint, you have a 70% chance of business success when buying any type of franchise, as opposed to a 5% chance of success, when starting a business on your own from scratch, regardless of how good your idea is, how much money you have or what experience you may bring to the table. Franchises are regulated and have strict requirements by the FTC (Federal Trade Commission). They’re also regulated by most states, which helps protect the Franchisor and Franchisee to bring about the likelihood of more success. Businesses also consider Licensing their business model, as a way of expansion, but in many cases these licensed companies are operating illegally as a franchise. There are specific differences between Licensing and Franchising, that even many good attorneys misinterpret. As with any franchise, still there are risks that accompany any business, no matter what factors are in place – there are failures, as well as great success stories.
The franchise industry concept has been especially strong and growing rapidly, since the 1970’s. The reason, is that it affords people the opportunity to be in business for themselves, run their own ship…………..and have a partnered foundation of associates to work with, who’ve claimed the experience to be successful. If you want to expand your business in the quickest and most economical way possible, then maybe it’s time to consider Franchising. There are hundreds of topics to consider before you do, so be diligent in getting the professional advice required, from franchise experts who have years of experience and success under their belt. Your long term success depends on it.

MarketCorp International, Inc. “The Franchise Experts” ww.MarketCorp.net 678.462.8646 Atlanta, GA USA