In 1994, Todd Beckman’s plan for building his tanning business was simple: start small, cultivate and then expand.
“My original expectation was just to have three stores, and it just took off,” said Beckman, 42, chief executive of the Tan Co. Today, the Fenton-based company has 72 locations in 12 states and annual revenue of $35 million.
Franchising played a big part in that growth, which was something he hadn’t expected. “Franchising was not a thought, not at the very beginning,” Beckman said.
Companies with a business model that can be replicated have two ways to grow. They can add locations, financing each expansion themselves and taking full ownership of the new operations. Or they can find partners to open franchises under the company name. The franchise partners pay a fee to the company, and in return get access to its business model, products and marketing and advertising tools.
Franchising helps companies defray the cost of expansion, which can lead to faster growth.
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