Six,Reasons,Why,Business,Franc business, insurance Six Reasons Why Business Franchising Works
Small offices have unique needs, and thatincludes document shredding. Designed with the smaller business inmind, the Dahle 20314 is a cross-cut shredder that offers Level 3security and brings you into compliance with federal regulations. The As we all know to live in this world we have to perform some activity by which we can earn money. There are many activities by which we can earn money and meet the standards to live in this society. And from one of them is franchise. Franc
Franchising can allow your business to grow at rapid pace, and gain a presence in new markets. Although there are disadvantages to franchising your business, and although it will not suit all business models, franchising is often an under-used tool among business owners that are looking to scale their operation. Following are six reasons why you should consider franchising your business.Turbo Charge Your Business GrowthOne of the greatest benefits to franchising is getting things done fast, and with less labour costs. Youll be able to focus on recruiting franchisees, and then they will focus on growing your business in their region. You can even sell franchisees for an entire country or continent, and allow the franchisee to take your business to the next level.Reduce Gearing As You GrowYou will increase your capital base from franchising fees as your business grows. A business will traditionally borrow money, and increase their gearing as they grow into new markets. With a franchising model, youll be able to see your sales grow, your market reach grow, and youll also be able to see your balance sheet strengthening at the same time. Prevent Equity DilutionWhen you grow your business it can be tempting to give away equity to fuel growth. Although in many ways this can work out well, it does mean that in the end youre left with a smaller share of the pie. When you grow your business through franchising, youll be able to grow with low levels of debt and without diluting your equity position either.Galvanize Your Business Against CannibalisationWhen you make money from each franchise that is sold, and you also make money in management fees (usually calculated as a percentage of revenue) cannibalisation ceases to be a problem for the franchiser unless this is something that worries franchisees. The reason: as you take on more franchisees, you make more money from licensing; and although more franchisees may damage a franchisees profitability, it will not damage total revenue, and therefore you will continue to prosper even if your franchisees struggle.Limit LossesDuring a bad year, its possible to make less money, but its not possible to lose money through franchisees losing money. That risk is assumed by them. You will charge management fees as a percentage of revenue, and as revenue cannot be a negative number, you will always earn an amount in management fees from this. In the long term the profitability of franchisees is of paramount importance, but its good to know that you will be stronger than your competitors during more difficult trading periods. Work With A Network Of EntrepreneursEntrepreneurs are naturally more motivated than employees; they have a profit incentive. You will be able to benefit from this through having each and every franchise managed by a business person with a strong incentive for their franchise to do well.
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