10 Significant Advantages of Franchising a Business

Your business sales are strong, you’re ready to establish a greater presence, and you know you’re ready to grow—if only you had the resources.



Sound familiar? If you know it’s time to grow but don’t know how to get there, it may be time for you to understand a few critical franchising benefits.

Many business owners are short on one of three things: money, time, or people. When it comes to the advantages of franchising, many business owners find that it tackles all three of these issues at once. Keep reading to learn how to run a successful business by franchising for easier growth.

1. Business Capital

It’s no surprise that “money” is the top reason small business owners are stressed these days. Getting funding is a common barrier to growth, making it so that even your most creative ideas for expansion are impossible to reach.

For businesses seeking capital, franchising is a great option. It lets you grow your business without debt, as the franchisee is the one providing all of the funding for the new business. They’ll fund their own business opening, operating expenses, signage, and rent, leaving you free to expand with few associated costs.

2. Limited Risk and Liability

When your franchisee starts their own franchise, their name will be the one on the lease and related contracts. They’ll lease equipment and cars as well, making them the ones responsible for anything that happens with these units of property.

In other words, you’ll have little associated liability with the property, which lowers your overall risk. This means better risk reduction in the case of an accident or consumer litigation.

The same holds true for your franchisee’s employees: your franchisee will deal with all employee-related expenses, from training to work-related injuries. This also includes employee litigation for things like discrimination or sexual harassment.

3. Motivated Leadership

Many growing companies run into roadblocks when the time comes to hire additional leaders. For any business to be successful, its leaders must be fully committed to the company.

Franchisees, on the other hand, are highly motivated out of sheer necessity. Because they invest their own money into their business, their future is tied to the success of the business.

This means you can trust your franchisees to stay for the long-term rather than leaving on a whim, to keep a sharp eye on their employees and operations, and to look for opportunities to improve their business.

4. Fast Growth

Expanding a business can take a significant amount of time. From convening with your advisors to securing a property to training staff, most of your time and effort will be put toward this new opening.

However, when you franchise your business, the franchisee will do the heavy lifting for you. This means that you can grow your business quickly without putting in as much personal time and effort, allowing you to compete more broadly in the market.

5. Brand Building

Because you have the ability to grow your organization without significant overhead, you may find yourself building your brand much faster than you’d be capable of otherwise. Additional retail presence, of course, means additional visibility in the market—an effective and effortless way to broaden your brand recognition.

In addition, many franchisers choose to have franchisees contribute to a communal fund for promotions, brand-building, and advertisement. This fund is something you’ll use at your discretion, allowing you to enhance your overall brand with easy access to the money you need.

6. Lean Organization

Your overall staffing will involve a small head-office structure, as franchisees will assume most of the responsibilities a corporate office would otherwise tackle. This means you’ll need fewer parties on your team for a leaner organization overall.

7. Easy Supervision

Because your franchisee is responsible for the day-to-day operations of their franchise, your personal supervision requirements will be much easier. The lean organization noted above means you’ll avoid dealing with the granular details of each franchise, allowing franchisees to shoulder the responsibility of hiring, training, payroll, accounting, and more.

You, in turn, will be supervising the franchisees alone, making for easier supervisory work overall and more time focusing on your business’s overall strategy.

8. Profitability

Business expansions can be highly profitable as a rule, but the lean organization and motivated leadership of a franchise can increase that profitability even further. When franchisees deal with staffing, supervision, and more, it opens your franchise organization for a higher return on investment than you might normally achieve.

9. Higher Valuations

To begin franchising a business, you’ll have to create a scalable growth model that allows your franchise to expand in a controlled manner. Once you have this model—in addition to a few proven success stories under your belt—you may find yourself earning higher valuations than you might otherwise. With the potential for faster growth and higher profitability, your business will look much more appealing when the time comes to sell.

10. Access to New Markets

As mentioned above, you’ll find that most franchisees are resourceful and motivated, given their material franchise investment. Their keen focus on the growth and profits of their franchise can allow them to generate high revenues, even in places you may not normally have thought to expand your business.

While you don’t want to consider opening a franchise in a market you feel would lead to franchise failure, you may find your franchisees willing and able to veer into new regions, states, or even countries. By taking smart risks with your franchises, you may find yourself expanding into surprising new markets thanks to local partners that make the growth effortless.

Get the Advantages of Franchising Today

If you’re worried about barriers to expansion, the advantages of franchising can help. By reducing your risk, securing funding, and finding the right people in one fell swoop, franchising is a great way to make the most of your business’s growth.

Want to get started? We can help you take your first steps to develop your new franchise. Learn how to franchise your business from the pros today!