Advantages of Franchising

While franchising provides Franchisees with a proven system and the support of a much larger organization, the advantages to the Franchisor are even more significant.

Capital – Since Franchisees use their own capital, the Franchisor has virtually no investment at the unit level.

Bulk Buying Power – its all about units, the more units that you sell the better buying power you have. Franchising brings the ability to have the whole group collated as one to receive substantial discounts and rebates based on unit sales. This can be the difference in maintaining that competitive edge over your competitors.

Return on Investment – Because of this lower investment, ROI will be significantly higher.

Risk Reduction – With no capital invested in units, risk is reduced substantially.

Limited Contingent Liability – The Franchisor generally does not sign leases, or takes on financing, etc., and will thus expand with limited contingent liability.

Speed of Growth – By leveraging off of the time and efforts of its Franchisees, a Franchisor can grow much faster without adding staff.

Reduced Role in Day-to-Day Operations – As a Franchisor, your primary concern involves the Franchisee’s top line performance, reducing the scope of your involvement in day-to-day management.

Reduced Vicarious Liability – The liability for acts of employees (e.g., sexual harassment, EEO violations, etc.) and for occurrences in the outlet/ business (e.g., slip-and-fall) accrues to the Franchisee, not the Franchisor, for the most part.

Highly Motivated Management – Franchising can provide a company with highly motivated management who will treat individual units as its own.

Quality Control – Franchisees generally keep their units in better operational shape than company managers and, as a part of the community, are better able to promote these units locally.

Long-Term Management – The Franchisor can invest in the long-term training of its Franchisees, as they are unlikely to leave short-term.

Unit Performance – Units are generally better run, as is reflected in the fact that franchised stores generally outperform company-owned stores in terms of sales volume.

Lean Structure – Franchisors can grow the organization without adding significantly to overheads.

Brand Building – This ability to grow the organization without substantial additions to overhead will allow Franchisors to grow their retail presence and their brand more quickly and effectively.

Advertising – Franchisees will often contribute to a common advertising and promotional fund. This fund will be used to promote the brand under the direction of the Franchisor.

International – International expansion becomes easier, faster, and carries far less risk since a local partner becomes involved.

Moreover, it is important to note that franchising is not an exclusive strategy. Most Franchisors use it in conjunction with company-owned growth to compound growth and keep a revenue stream.

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FRANCHISOR / FRANCHISEE SERVICES

Testimonials

What our clients say about us.

  • "A quick one to say thanks for Tuesday night. I thought it was a great venue, great atmosphere and a bunch of knowledgeable and colourful business people. Hats off mate!" 

    Chris WalkerWriter & Editor, Wordfox

  • "Mark has extensive franchising and business experience and combines this knowledge with great enthusiasm and drive. He is a brilliant person for bouncing ideas around and always brings creativity and a fresh perspective to the table. Would recommend Mark for his wide ranging abilities in policy, strategy, industry knowledge and innovative thinking."

    Jackie DihmOwner, FitChips

  • "Mark and I always seem to catch up at just about franchising event around the country. He is deeply immersed in the business community and is a great source of help and advice when required. He is exceptionally knowledgeable and a really nice guy who is always a pleasure to catch up with."

    James ScurrManaging Director, Cashflow It

  • "Mark brings a sense of energy and positivity to everyone he meets. I have total trust in him as a fellow consultant, and together we are able to get great outcomes for a client we jointly work with. He has an instinctive understanding of how businesses work, and is able to bring structure and systems which enable businesses to replicate and grow. He is comfortable working with financials, whilst his greatest strength is probably his insight into people. Mark is supportive and encouraging, yet not afraid to be honest and forthright when required. I look forward to working with Mark on future projects."

    Jayne GriffithsHR Director, My Hr Adviser

  • " I must say you put things in a way that made me understand things and I really got lots from our session and plan to be making changes in the future. I look forward to the next steps in our meetings." 

    Sandy AndersonManaging Director, Spruce Ups

  • " On behalf of Legalwise Seminars, we wanted to thank you for chairing our Franchise Law seminar. We are extremely appreciative of your significant contribution. Overall, the feedback received from the seminar has been excellent and we are delighted with the outcome." 

    Sintija DobrotinsekProgram Manager, Legalwise

  • " Mark has an extensive franchise consulting and business development practise in WA and beyond, and is an active contributor to the franchising industry through his membership of the Franchise Council of Australia WA Chapter Committee. Mark is a diligent and hard working adviser and he generously shares the benefits of his knowledge and experience with others for the betterment of franchising as a whole. Amongst Mark's outstanding qualities as an adviser are his willingness to rigorously pursue improvement and challenge the status quo, and to be honest and direct in his advice."

    Veronica JumeauxPartner, HWL Ebsworth

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