Main Advantages of Franchising Business :
Raise Capital: Capital is always scarce in growing a business. In franchising the capital needed to expand the business is provided by the Franchisee. It is the classic case of using OPM, or other people’s money.
Motivated Personnel: Trained, motivated management is part and parcel of franchising. It is difficult to find and keep good experienced managers/employees, who are so necessary to grow a business. With franchisees, you have people who are well trained in the franchise systems and who are also very motivated because their capital is at risk.
Efficient: Profitable, Franchise units tend to be better run, therefore more efficient and profitable than company owned units, for the simple reason that the Franchisees capital is at risk and they tend to be very motivated.
Rapid Expansion – Today’s marketplace changes very quickly, often if you don’t move quickly on expanding a concept, someone else will. The window of opportunity will close, and you just miss it. There is no other way to grow as rapidly as franchising allows.
Achieve Optimum Size: Maximum profits are realized by getting very large. Because there are few impediments to growth through franchising, it offers the opportunity to have 1000’s of units through out the world, and no other business expansion model can offer that.