Spreading Roots

- Rick Grossmann

Franchising has grown in popularity over the last several decades as a business expansion model worldwide. The structure that the franchise model offers can streamline the process for organisations to move into foreign markets more efficiently. Franchising can also be far more cost-effective than other expansion models such as corporate chain outlets.

The most popular expansion models have related challenges to consider:

Corporate chain outlets give the brand more control but are far more costly to launch and operate. Typically, these costs will include buildout and construction of the locations as well as the related human resources.

Business opportunities can be similar to the franchise model but usually have less control over the brand and operations. This can be problematic due to inconstancies in quality that occur from the lack of systems and oversight.

Franchising is more efficient than the other options and costs much less than corporate chains.

Many businesses have chosen to enter new markets by utilising the franchise infrastructure to gain the inside track in the marketplace.

Here are just a few of the advantages of the franchise model:

Uniform systems: Most franchise organisations have a proven track record for doing business. Their proprietary polices and procedures are contained within the operations and training manuals.

Common brand: As a brand grows in a given market, the awareness of the brand increases and the individual units benefit. Consumers learn to trust the brand and will tell others about their experiences, which brings in new customers.

Training and support: The company’s training programmes and resources enable the individual units to scale up and grow. Ongoing support allows franchisees to avoid costly mistakes and get on the fast track for success and is one of the most important factors to a franchise system.