Franchise Your Business: Expanding your business: Buying a franchise
When a person buys a franchise, he or she is purchasing someone else's "system", trade name and learning curve.
In return, the Franchisor receives money, normally both an Initial Franchise Fee and weekly or monthly royalties.
In its purest form, franchising has been called the classic win-win situation. Both the Franchisor and the Franchisee succeed.
Expanding a business and the benefits of franchising to the Franchisor include:
 | Profit Potential | | |
Franchisors often generate substantial profits from their franchise operation,
including the Initial Franchise Fee and on-going royalties or service fees. Other potential profit centers
include the sale of products or equipment, sales of international licensing rights, leasing real estate and/or
developing financing programs.
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| Fewer Managerial Problems | | |
Franchising creates the most motivated managers in the world -
Franchisees who have invested their money and time into their own futures.
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| More Rapid Expansion | | |
Few companies have the strength necessary to penetrate and dominate
a new market quickly. A Franchisor can develop new areas using the financial and managerial resources
of its Franchisees, rather than investing its own money, time, personnel and energies.
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| Lower Capital Expenditures | | |
The expense of expanding a business can be overwhelming. By selling
a franchise to a motivated owner, the Franchisor eliminates almost all of the costs normally associated
with opening new locations.
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| Lower On-Going Expenses | | |
The fixed and variable expenses involved in running a franchise company
are much lower than operating a similar number of company-owned facilities.
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| Marketing Advantages | | |
As local, regional and national campaigns take effect, all locations benefit,
including company-owned units.
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| Economies of Scale | | |
The more locations a company has, the more buying power it commands.
It is also easier to secure desired sites.
For these and other reasons, thousands of U.S. companies have chosen to grow their operations through franchising.
Franchise Your Business! »»
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