Is Your Business Franchisable?

Have you have ever asked yourself, “Should I franchise my business”? Franchising is a dominant force in the US economy and is an excellent way to grow a business, but for those new to the concept sometimes it requires a professional franchise development consultant to explain the evolution and benefits of franchising.

Franchising refers to the practice of using a firm’s successful business model and has been around in the United Stated for a century and a half. Isaac Singer first got the franchise ball rolling in the 1850s when he made improvements to an existing model of a sewing machine and made attempts to franchise the concept. Similar franchising efforts were also attempted years later by automobile manufacturers and well known modern brands like Coca-Cola and Western Union. Modern franchising, as any experienced franchise development consultant will tell you, can be traced back to the 1930’s when Howard Deering Johnson established the first modern restaurant franchise based on his successful Quincy, Massachusetts Howard Johnsons restaurant. During the 1950’s, franchising experienced a boom period due to the development of the U.S. Interstate Highway System and people’s desire to experience the security of their favorite local establishments as they travelled farther and farther from home. Today, the franchising industry employs over 18 million people in the U.S and there are believed to be more than 750,000 franchise businesses in the U.S.

For an individual who says “I want to franchise my business”, the system offers an alternative to expanding a business using their own capital to open additional stores owned by the company. Instead, the business model is sold through a franchise offering to franchisees who pay an upfront fee, called a franchise fee, for the opportunity to duplicate the business model and run the business in a clearly defined territory. Either the franchisor or a professional franchise development consultant trains the franchisee how to run the business model and provides support to the franchisee throughout the life of the term of the franchise agreement. In exchange for this support from the franchisor, every month franchisees pay a small percentage of the gross revenue called a royalty fee. Franchisees have the right to extend the term of the franchise agreement after successful completion of the first term. One advantage of franchising that a franchise development consultant will often mention is that the franchisee is said to have a greater incentive to make their location successful than a direct employee because he or she has a direct stake in the business. The only other typical payment in a franchise system, is a monthly payment to a fund called an advertising or marketing fund, that is used to promote the brand and benefit all of the franchisees through increased sales.

To speak with a sales representative about our franchise opportunities,
call us today at 888-445-2882.