4 Great Reasons Why Franchise Model Can Work for You

As a business owner, you likely spend plenty of time thinking and dreaming of new ways to innovate, expand, grow, or franchise your business. If you are restless and eager for new opportunities, new ways to reach customers, and new ways to adapt to your changing industries, you may want to consider changing the whole structure.

Enter the Franchise Model

When you franchise your business, you create an easy-to-replicate business model that has proven successful, allowing you to scale quickly and maximize profits. The most successful franchises are those that can reach that same level of success in multiple locations and markets. It leads to exponential growth and more freedom for Franchisors that establish the framework for scalable operations and management.

The franchise model has proven successful across a wide range of industries, as it provides a proven process for many businesses to follow. Here are 4 great reasons why the franchise model may be the perfect way for you to expand your business.

Reason 1: You Create Brand Loyalty

When you franchise your already-successful business, you introduce your brand into new markets. Consumer behaviour indicates that people gravitate towards stable, trustworthy brands and established reputations. When you franchise your business, you gain a wider presence and target multiple audiences, which provides more exposure and opportunity for the consumer to get to know you.

Brand awareness creates loyalty and trust. It keeps people coming back and also entices new customers to feel comfortable giving your business a try. Once you establish that trust, you can create long-lasting relationships in the communities you serve.

Reason 2: You Take on Limited Risks and Liability 

You’ve likely spent countless hours and tireless nights working to grow your business from top to bottom. You pour your heart, soul, and money into your venture. When you franchise your business, you can remove some of the risks from the expansion process. 

Franchisors rely on investments from franchisees interested in becoming a part of the team. You begin to rely on the capital from these individuals, which removes risk and liability from the growth process. 

Instead of fronting your own capital, you can instead invest your time in honing your business model and providing the best training and support possible so your franchisees can walk with you down the path towards success. This paves the way for scalable growth with much less risk coming out of your own pocket.

Reason 3: You Can Accelerate Your Growth

If you believe that your business can be successfully replicated and introduced to new markets, franchising may just be the perfect model to expand. Not only does this allow you to open multiple stores simultaneously without concern about the day-to-day operations, but it gives you more revenue streams to reach higher profitability. 

In fact, the American franchise market is expected to grow at a rate of 3.5 per cent this year alone. By focusing on replicable practices, you can accelerate your growth and exponentially increase your earning potential.

When you franchise your business, you initially need to dedicate time to the creation of resources useful for your franchisees. Creating the infrastructure to recruit, train, and support means that franchisees are able to scale and grow much faster. 

Reason 4: You Gain More Freedom

Many business owners gravitate towards the franchise model so they can let go of some of the control over daily operations and focus on the larger picture. Instead of working inside the business every day, they can enjoy working on creating a business model that others can run. 

Franchisees manage their own employees, allowing the franchisor to conciliate their employees and streamline the corporate management process. You can trust that the structure of all day-to-day operations can be handled confidently by your franchisees. By creating a model that is proven successful and an easy-to-replicate operational strategy, you hand franchisees the golden ticket to success with your business. 

Conclusion

Growing your business may present challenges and hurdles to overcome, but when you use the franchise model, the framework is laid out for you. The success of the franchise industry has remained steadfast throughout the years, and it continues to be a beneficial model for business expansion.

If you are ready to franchise your business, trust our franchise experts to help you with each step of the journey, contact us today.

Why are Sports Franchises increasing in Value Fast?

We sometimes forget that the professional sports teams we watch on Television every week are virtually no different than the Mcdonald's or H&R Block franchises down the street.  The owners tend to be billionaires and there is obvious exclusivity associated with professional sports franchises. Still, in the end, it is the same concept, same system, and same franchise platform that makes the business model so effective. 

In recent years, the valuations for basketball franchises have led the way in the news with great increases in valuations, football is not far behind and most other professional franchises seem to also have amazing values associated with the franchise businesses.  They are growing each year in their value and there are many different contributing factors that are driving this trait.

As a pretty regular person like myself, the idea of owning a professional sports franchise seems like a pipe dream, but the factors that are driving growth in these segments can be valuable to understand when considering investing in other franchises and in positioning your own brand for franchising.

What are the statistics for professional sports franchise growth?

1. The Values of NBA Teams are increasing exponentially fast, up 74% from 2015 to 2016.

2. The average NFL team value is $2 billion, up 38% from 2014  (The top team is Dallas Cowboys at $4 billion – incredible considering Jerry Jones purchased the entire franchise for $140 million)

3. In 2015, Major League Baseball teams eclipsed the record, $1.2 Billion Average Valuation with the Yankees leading the way at a $3.2 billion value

What Makes Them Valuable and such an appreciating asset?

There are a few key elements that make these sports franchises so valuable to investors. First off is the structure that is used and the consistent business model in place in each league.  It is in place to carefully protect the integrity of the brand itself and the overall association with the teams, such as the NFL, MLB, and NBA.  The teams have a structured, rule-driven platform they must operate within to stay compliant with league rules and structure.  The business model is based on a diverse revenue stream combining Advertising Dollars, Sponsorship revenue, Royalties, Ticket Sales, and Endorsements.  The leagues generally share this revenue generously with the teams and the teams support the league's initiatives to grow the fan base.

As in any franchise system, the value comes down to a number of key elements:

The training involved is also held to a higher standard. They provide upper levels of experience with the end consumer and make sure that all processes are of value to those who participate in the franchise's end result. They strive to provide a consistent experience for the end consumer when it comes to watching the games or visiting the fields.

When it comes to branding, these leagues excel in virtually every category, they genuinely are marketing and branding experts and support the franchisee’s business and customer growth.  You’ll find TV marketing, revenue sharing, and even royalty sharing from the ongoing advertising and marketing plans.

Each league is dedicated and consistent in providing Goodwill and charity work – providing value to the community and always communicating to the public why and how the franchise is involved in the market.

Franchisees benefit by showing they are willing to give back to those who support their team so it’s important that goodwill is part of the franchise process.

A few other factors that make the value grow even more is that the supply of professional sports franchises is extremely limited and exclusive.  Each franchisee must be approved as to who will be permitted to join the franchise network and must pass careful scrutiny as to whether they will be approved for franchise ownership.

With the growth in demand for the services and the product, the demand for the franchise model is growing quickly, and the valuation of the franchise increases.  It is the ironic scenario where when a franchise brand increases the demand from the consumer, the franchise value increases as well.   It is a case of a franchisor dedicating their efforts to driving the consumer business and in turn creating demand for the franchise investor.

If you’re considering a franchise of your own or franchising your business, be sure to call our office today to see how we can help you choose the right one for your future.  Although you may not be considering a billion-dollar investment in a professional sports franchise, the concept, key elements of the franchise relationship and strategy should be the same for any franchise investment.

By looking for key criteria in a franchise model before you make an investment into the system, you will significantly increase your odds of a positive and successful franchise endeavour.

For more information on franchising, Contact Us at [email protected]