Is Franchising Better Than Building A Business?

SmartCompany.com.au:

… Well, franchising can be great, but it can also bring a whole world of pain.

Franchisees’ capital will help you open stores quickly and spread your brand around the country fast. With skin in the game, so to speak, franchisees are often highly motivated to make their business work. They will work harder and longer than employees, and in a service business this can make the difference between success and failure of the chain. (Although recent research shows nearly a third of franchisees buy in for ‘lifestyle’ reasons so maybe this is not always true.)

In any case, the fact that franchisees have invested their own capital in your business, and probably staked their family home on it, means they are likely to have much higher expectations of you than even the most engaged and committed employee.

To have a successful business you must have excellent relationships with your franchisees. You have to keep them in the loop, make decisions that take account of their interests, and help them make money.

If your franchisees are not making money, and this may not always be your fault – you won’t be either within a very short period of time.