Should You Franchise Your Business in the New Year? Here are Some Compelling Reasons to go from Small Business Owner to Franchisor.
If you’re reading this, you have probably thought about franchising your business. Maybe you don’t know where to start, or maybe you need a little extra motivation to take the first step. The following provides 23 reasons – in no particular order – to franchise your business in 2023.
1. Private Equity Remains Interested in Franchising
Private equity and franchising continue to be a great pairing. This means that you may have an opportunity to find an investor in your franchise company and/or a buyer when you are ready to exit and sell your franchise organization.
2. You can Reach More Customers
When you franchise your business, you can expand your reach to more customers in more locations and territories around the United States and the world.
3. 66.7% of Franchise Prospects are Willing to Follow Systems
Two out of three franchise prospects say that they are ready to follow franchise systems right now. That means you have a willing group of franchisee candidates committed to helping you grow your business the way you want it to grow.
4. Your Customers Have Asked About Buying a Franchise
If you have ever been asked by a customer if your business is a franchise or if they could open one in their hometown, then the writing is on the wall. Hopefully, you haven’t missed that obvious indicator. Do not be dismayed if you have not been asked yet, as there are still 22 other reasons to franchise your business.
5. You can Capture Market Share Faster
Franchising allows you to multiply your growth efforts and not just add a few locations. That’s why my podcast is called Multiply Your Success because you can grow your business faster through franchising.
6. There is Pride of Ownership
No one cares more about their business than the owner. The same can probably be said about you and any of your potential franchisees for their own franchise business.
7. New Business Startup Sentiment is High
The start-up sentiment for budding entrepreneurs remains above 50%, despite the mixed economic climate we are currently in.
8. Franchisees Provide Local Market Knowledge
A franchisee will provide you with local market knowledge you would not be able to gain access to. Your franchisees will know the latest local developments and the areas to focus their marketing efforts.
9. Franchising is Fun
There are many serious reasons to franchise your business, but let’s not forget that franchising is fun too.
10. You can Gain Supplier Discounts to Reduce Operational Costs
As you expand to multiple locations, it opens the doors for you to reduce operational expenses for your entire system with bulk buying discounts. (HINT: I have seen some suppliers provide discounts just by letting them know they will franchise.)
11. Your Business May be in The Top 10 Categories for Franchise Inquiries
The top 10 categories for franchise interest over the last 90 days are (as of December 20, 2022): home services, senior and health care, cleaning and maintenance, business services, food and restaurant, child-related, education, financial services, retail, and pet services.
12. You can Improve Operational Efficiencies
Iron sharpens iron. Your franchisees will offer ideas and suggestions that you may never have considered. They can also help you test out new ideas. This will help you improve your systems and processes over time.
13. You can Make an Impact Locally and Globally
Franchising your small business allows you to make an impact at a local level through your franchisees and at a global level through your network of franchisees.
14. Franchising Offers the Chance to Capitalize on Your Intellectual Property
You are most likely worth more for what you know than for what you can do in a day’s work. Franchising allows you to take your single greatest asset (your business) and create a royalty stream. Think about a famous songwriter that earns royalty payments when people buy their music. If that songwriter never records their music and sells it, no one buys one. The same can be said about your business. If you don’t franchise it to share it with the world, no one will ever be able to buy it.
15. New Business Start-Ups Remain High
New business filings continue to exceed 400,000 new start-ups per month. Certainly, these are not all franchisees, but some of them are. By comparison, before 2020, there were around 300,000 new business start-ups per month.
16. Franchising Your Business Costs Less than You Think
Franchising your business is often less expensive than opening one company-owned territory or location. Most business owners can get started by franchising their business for well under $100,000.
17. Your Business May be in The Top 10 Fastest-Gaining Categories for Franchise Inquiries
The top 10 growth categories for franchise interest over the last 90 days are (as of December 20, 2022): automotive, food and restaurant, retail, health and fitness, computer and internet, financial services, staffing and personnel, pet services, home services, and travel and lodging.
18. You can Give Your Staff an Opportunity for Career Advancement
In today’s employment situation, you will want to provide ways to advance your great staff. Franchising will provide you with that opportunity. You can promote your key staff through your franchise organization, or they can eventually invest in their own franchise.
19. You can Create Wealth for Yourself and Your Franchisees
When you franchise your business, you can create wealth for your franchisees and yourself. It should always be an avenue for both of you to do so.
20. Franchising Your Business Gives you a Jump on Your Competition
With mixed economic conditions, now is the time to be proactive and seek to grow. A growth-minded entrepreneur sees opportunities when others pause, contract, or “wait it out.”
21. Congress is Currently Split
Congress is currently mixed, which means that it will be harder for any one party to make drastic law changes ― making current business rules more likely be stable for the next couple of years.
22. You can Turn Your Dream into a Reality
You may have always dreamed of building a national or international brand. Franchising your business gives you a chance to make your dream a reality.
23. You’ll Have Unique Opportunities for Joint Ventures
When you franchise your business, unique joint ventures and other opportunities become possible ― allowing you to have more options and think more creatively.