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Expanding your business through Franchising

March 11th, 2011 by Nick Strong in Franchise Sales and Development in the UK

Nick Strong, MD - Select Your Franchise

Nick Strong, MD - Select Your Franchise

One of the big problems that face a maturing, successful business is how to effectively expand from being a single or localised group of outlets. While a few stores can often be managed effectively by the business owner, it becomes quite a challenge to keep them all on track as the business expands. There are several solutions to help facilitate expansion:-

  • Appoint area or store managers to effectively take care of each business.
  • Franchise or license the concept to would-be business people who want a ‘ready made’ successful business formula.

The first option allows expansion whilst retaining a central control, however it does carry substantial commitment of investment into premises and human resources everytime you wish to set up an additional outlet.

Franchising your business, retains a level of central control as each outlet must abide by the franchise contract that’s signed by both parties. The franchise contract, amongst other things, outlines controls on branding and how the business should be operated to ensure it follows as close as possible to the standards and success of the original pilot businesses.  The main benefit to the business owner though is that each additional outlet setup is effectively a stand alone business. This frees the business owner from the financial investment that is required in starting up additional company-owned outlets. Effectively, each outlet will ultimately be responsible for managing the costs of starting up his or her new business, whilst benefiting from the branding and proven system that the franchisor provides.

This second option does of course rely heavily on the ability to be able to identify and package the key business formula so that it can be replicated by another aspiring business person. Identifying if this is achievable for yor business is therefore the first step in considering the franchising of a business. In order to determine this is can often be helpful to enlist a franchise consultant who has knowledge of the franchising process. They can help you to identify the core business formula and determine whether franchising it is feasible.

Another important thing to consider is that the business owner must realise that to effectively franchise his or her business they may have to give up running the business themselves. Franchising the business will require time and effort to focus solely on being a franchisor and helping to establish and support new franchisees. This can seem a daunting prospect for business owners if they are very attached to running the business they have built.


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