What Are The

Advantages of Franchising ?

Franchising offers a number of financial and practical advantages over traditional expansion methods like adding satellite locations, which usually amounts to “reinventing the wheel” for each new location. These include:

1) Faster Expansion compared to traditional one-at-a-time methods such as opening new locations.

2) Economies of Scale resulting from purchasing products, furnishings, advertising, and promotional materials in larger quantities for both the primary business and the new franchises.

3) Enhanced Business Image can accrue to a company that is franchised; giving it increased credibility and the perception of a higher level of professionalism.

4) Lower Capital Outlay and Liability versus opening satellite locations.

5) Minimal Increase in Personnel, since employees for new locations will be hired and paid by the franchisee.

6) Better Motivated Personnel to operate new locations because franchisee owner-operators will be running their own business.

Does a company have to be large or unique to franchise?

No, a company does not have to be large or even unique to franchise. It only has to be successful! Many of today’s most successful franchises began as small operations, many in crowded fields where uniqueness is scarce. Examples that come to mind include Wendy’s, Popeye’s, Papa John's, Quizno's, Curves Weight Control, and Cold Stone Creamery.