Should You Expand Franchise Opportunities?

Now that you are a franchisor, are you content with the gradual pace of growth of your franchise company, or would you like to expand franchise opportunities more rapidly? The answer to this question is likely to depend on your vision for the franchise company as well as on the financial health of the franchise company and the individual franchises.

Turning your business into a franchise is like jumping over a huge hurdle. It is hard to achieve, but once you do achieve it, the going can be comparatively smooth. Some businesspersons are content to let their franchise companies grow at a slow, organic pace once they have jumped over this first hurdle and achieved a certain size. Others are more ambitious and want to expand franchise opportunities aggressively by bringing new franchisees on board and spreading to territories further afield. Which of these models is the better one to follow?

 

What Options Exist to Expand Franchise Opportunities?

 

It is worth pointing out that running a franchise company is not quite the same as running a small business. One obvious difference between the two situations is that of scale: any gambles made when running a small business are bound to be smaller and to have fewer, more containable consequences. With a franchise company, risky decisions are not only likely to affect a larger number of people, but they are also bound to have more numerous and more complicated consequences. Thus, any discussion of whether to expand franchise opportunities must be sober and well-thought out. Accelerated growth can have negative consequences for a franchise company. It can result in great losses for the new franchisees, and this can ultimately have negative repercussions for the brand name. Hence, it is better to act prudently and make decisions that are backed by the facts on the ground.

There is an appropriate growth rate for every given franchise company. It is important to determine what yours is. If the existent franchises are not doing too well, it might be an indication that the goods or services offered are not competitive. It might also indicate that the franchise territories as they exist are too small. These are situations that call for changes other than expansion.

Trying to expand franchise opportunities internationally is another possible consideration. This can be a wonderful opportunity for growth, especially since overseas markets are bound to be underexploited. However, if you take this path, you will have to contend with franchise regulations in other nations and logistical problems like supplying products and training to overseas franchisees.