How Franchising Saves a Business

There are a million and one misconceptions about franchising but the truth is that most people don’t have the slightest clue about what franchising really is — nor how it works for small business firms. More than 300 different industries and business categories use a franchising business model to distribute goods and services. It is estimated that the franchise industry accounts for approximately 50% of all retail sales in the US.

Contrary to popular belief, becoming a franchised business does not mean you are going to transform from a “friendly mom and pop operation” into money-hungry corporation dead set on maximizing profits (even if it means lower product quality). When you take that step into franchising your business, you begin to dictate to others how this business should be run.

With the control issue of the way, let’s explore franchising a bit more.

John Smith has been running his bakery for five years, a thriving and profitable business he wishes to expand into multiple locations – but John doesn’t want to sacrifice the time or money required to open a second, third and fourth location. So what does John do?

John does the smart thing and contacts Franchise Creator at  www.franchisecreator. com>) based in Doral for a free consultation, explaining how through franchising he can open multiple new locations seamlessly without investing much of his own time or money.

Very loosely put, a franchise is an exact blueprint of a successfully operating business whose details are provided to a new franchise owner in a document called the operations manual. Along with training and on-going support of the business owner (franchisor) to the person buying a franchise (franchisee), it allows for a seamless duplication of the business and its operations in a new location.

Franchising a business allows the franchisor to make money from each new franchised location in multiple ways. When a someone buys a franchise, they pay a substantial sum of cash in exchange for your trademark, training and the general knowhow of the business. (known as an “initial franchise fee”).

Each franchisee also pays a royalty based on a percentage of that franchise’s gross revenue, an on-going income from each location. To further ensure brand consistency, each franchisee must purchase all goods and products from you or a vendor associated with you — a grand total of three separate new revenue streams that franchising can bring to your business.

Each new location has to contribute to a national advertising campaign that is fully and solely managed by you. Finally, franchising puts the burden of all liabilities, risks and expenses on the franchisee, not you. All you need to do is guide your franchisee to success by using your time tested knowledge and expertise.

Contrary to a manager running your own location, each franchisee has a vested interest to make the business succeed and like you, will put their best effort in running the operation.

For more information, contact Franchise Creator at 305-592-9229 or visit

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