Franchising Is About Relationships:

The relationship between you—the franchisee, and your franchisor must be carefully nurtured for both parties to succeed. But as these business relationships develop, it’s important to define more specific key factors that might affect your individual situation. 

Some of the key ingredients for a healthy franchisee/franchisor relationship include communication, transparency, support and compliance. Read on for more!

Franchising Is About Communication: 

The business model between a franchisee and a franchisor will only succeed if their communication lines are open and consistent. Reliable reporting is one of the tendencies that the best franchises across all industries have in common. Quickly relaying pertinent information allows the franchisor to make adjustments to help franchises that are potentially struggling.

Franchising Is About Transparency: 

Managing a franchise relationship requires trust from both sides. What does that look like on the ground level? The more transparent both parties are regarding performance, the better the outcome for the franchisee and franchisor. By identifying clear markers of success, franchisors and franchisees can solve small problems before they escalate into large issues.

Franchising is About Partnerships:

Both parties have a vested interest in their shared success. This is demonstrated by the franchisees in the form of start up fees and royalties. While franchisors will only attract talented franchisees if they set up the business units to win by providing relevant resources.

Franchising is About Support: 

The franchisor will offer the franchisee the necessary tools to facilitate the management of the franchise business. They will provide guidance, training, support, market knowledge, a proven business model, and assistance to clear the path to franchising success. When selecting a franchise system to invest in, you want to evaluate the types of support you will be given and how well the franchisor is at managing the evolution of the products and services so that it keeps up with the ever changing consumer expectations.  

Franchising Is About Collaboration: 

Franchise relationship management is done best when partners collaborate openly and regularly identifying weaknesses and/or opportunities to grow at the business unit level. It is also important to understand how brand decisions at the corporate level affect individual businesses.

Franchising Is About Expectations:

Outlining clear expectations, maintaining consistent communication and living up to your end of the bargain are the primary ingredients to any successful relationship. These elements are all the more crucial between the franchisor and franchisee. In franchising, the importance of the relationship between franchisor and franchisee can't be overstated.

Connect with me and I’ll help you identify and navigate the best franchisee/franchisor relationship.

Franchising Is About Brands:

A franchisor’s brand is its most valuable asset. Consumers decide which business to shop at and how often to frequent that business based on what they know, or think they know, about the brand. If you become a franchisee, you must develop a relationship with your customers to maintain their loyalty. As a result, customers will choose to purchase from you, and recommend you, because of the quality of your services and the personal relationship you establish with them. But first and foremost, the customers will have trust in the brand to meet their expectations. Therefore the franchisor, as well as the other franchisees in the system, rely upon you to meet those expectations.

Franchising Is About Compliance:

You want to select a franchisor that routinely and effectively enforces system standards. This is important to you as enforcement of brand standards by the franchisor is meant to protect franchisees from the possible bad acts of other franchisees that share the brand name with them.  Since customers see franchise systems as a branded chain of operations, or rather one part of a whole body, the excellent products and services delivered by one franchisee benefits the entire system. 

Franchising Is About Brand Awareness:

Brand awareness is the primary advantage of becoming a franchisee.  Brand awareness will provide faster growth opportunities, deliver customer recognition and position you as the expert in your field. Brand awareness also eliminates market confusion and provides consumer protection — but only if the franchisor is able to provide the level of brand support you need. 

The majority of larger franchise systems have well-defined branding processes and are willing to make substantial investments in developing new brands, leveraging existing knowledge, implementing new technologies, and continuously improving systems. These systems also generally have clear marketing and advertising materials as well as vast libraries of implementation materials. 

Franchising is becoming increasingly popular and is a great way to become your own boss and join an established business model. As with any new step, it is important to understand all the factors involved with owning a franchise. By taking the time up front to fully comprehend the franchisor and franchisee relationship, it will help you make an educated decision that can lead to success.  

Franchising offers the potential to run your own business while leveraging the advantages of an existing brand. By understanding the franchisor/franchisee relationship, the key factors in a franchise relationship and the importance of brand awareness, you’ll be better equipped to decide if buying a franchise is the right choice for you.

Franchising Is Beyond Food: 

Let’s take a look at a few of the more common examples of a franchise. One of the most recognizable examples of the franchise model hails from Hollywood. Film franchises tend to make more money than individual productions, in part because audiences already know the characters and world or “brand” they’re buying into when they purchase a movie ticket or press play at home. Whether the story originated from a book, a comic book, a previous film or television show, studios invest the money to make the movie or TV show, then receive revenue from the theaters, networks or streaming services they allow to distribute them. The studio also receives a percentage from licensing if the franchise generates toys, clothing, memorabilia,  theme-park rides, etc.

The second example is sports franchises. All of the major sports in the United States have implemented a franchising model where teams that enter the league become members of the larger professional sporting organization. Just like with the movies, these teams receive royalties on merchandise sales, ticket sales, and sponsorship deals all while having access to the league’s resources, branding, and marketing practices. 

Franchising is practiced worldwide and exists in every sector and industry. 

Franchising touches every aspect of our lives. Connect with me and I’ll help you find the best business for you. 

From auto repair and gas stations, to convenience stores and fast food restaurants, beauty salons, plumbing services and even pet care, there is hardly an industry that isn’t dominated by franchising! Franchising is practiced in both the retail and the service sectors and can be seen in multi-national large chains to small, local individual businesses. Franchising is a common way for companies to expand their brand. The franchisor does the leg work by looking for potential franchisees (or outsources that role to a Franchise Advisor like me), and then helps them set up the franchises according to their regulated standards.

Franchising has Different Types of Ownership:

Franchise Ownership comes in many forms, and each form has its own set of benefits and drawbacks. Knowing the differences and familiarizing yourself with all of the available options can help you make an informed decision when considering a franchise. Some of the most common types of franchise ownership include: 

There are many types of franchise ownership, including businesses you can run from home which allow you to reduce overhead.

• Single-Unit Franchises – These are franchises owned by one franchisee that operates independently from any other locations owned by the same franchisee. 

• Multi-Unit Franchises – These are franchises that are owned by multiple franchisees and are usually part of a larger chain. 

• Area Development Franchises – These are franchises that allow for the development of multiple locations within the rights to a specific geographic territory. 

• Master Franchises – These are franchises that assign the rights to a larger geographic area to a single franchisee who, in turn, recruits and supervises franchisees with their franchises within that area.

• Specialty Franchises – These are franchises that usually involve specialized services, such as dry cleaning services or auto repair, restoration and are usually owned by one franchisee.

• Home-Based Franchises – These are franchises that allow franchisees to operate from their home, providing services such as lawn care, painting, kitchen remodeling, cleaning, or dog-walking that can be done from home without a traditional storefront.

No matter which type of franchise opportunity you pursue, it is important to understand the various types of franchise ownership.

Franchising is About Global Brands:

We’ve all heard about the success stories of McDonalds, Subway and KFC in the world of franchising. They are able to expand into new markets quickly and cost-effectively. These global brands are showing no signs of slowing down as they continue to pursue franchising opportunities in markets around the world, creating an ideal opportunity for small business owners and entrepreneurs.

We have all been familiar with franchises that serve fast food. Burger joints, pizza places, sub shops, and more. In fact, the word “franchise” is almost synonymous with the drive-thru window. 

Franchising today is more significant than ever. Some of the most popular businesses and products are part of a global franchise. Go to a supermarket and pick up any product, and there is a good chance that a franchise produces it. In fact, the possibility that the grocery store itself is a part of a franchise network is also very likely.

As you can see franchising has evolved into a colossal economic force. In fact, franchises are deeply ingrained in our daily lives. Shedding light on this extensive landscape, the annual Franchising Economic Outlook delves into a detailed analysis of the franchise sector, offering insights into trends, growth projections, and economic perspectives across various business lines and states. This report acts as a compass, guiding us through the vast and dynamic world of franchising in the present day.

The "2023 Franchising Economic Outlook," a collaborative effort between the International Franchise Association (IFA) and FRANdata, provides a comprehensive analysis of the franchise sector's performance and economic prospects. This annual report examines trends, growth projections, and economic insights across eight franchising business lines and state-specific outlooks for all 50 states and Washington, D.C. The report's key highlights include:

• Anticipated increase of nearly 15,000 franchise establishments in 2023, a growth rate of 1.9%, totaling 805,000 units in the U.S.

• Forecasted addition of around 254,000 jobs to the franchise sector in 2023, with total franchise employment expected to reach 8.7 million, growing at a rate of 3.0%.

• Predicted growth of the total output of franchised businesses by 4.2%, reaching $860.1 billion in 2023, up from $825.4 billion in 2022.

• Stability of franchises' GDP share of the overall economy at 3%, with the GDP projected to grow at a rate of 4.2% to $521.3 billion, slightly slower than 2022.

• Notable growth in service-based industries and quick-service restaurants compared to other sectors.

On the state and regional level, the report highlights varied rates of franchise business growth, influenced by factors such as business climates, migration trends, labor markets, and industry investments. Key state-level projections include:

• Predicted fastest franchise business growth in 2023 in the Southeast and Southwest regions.

• Top 10 states for projected franchise growth in 2023: Texas, Illinois, Florida, Georgia, Tennessee, North Carolina, South Carolina, Arizona, Colorado, and Indiana.

The Southeast region, boasting the highest franchise concentration in the U.S., is expected to reach an estimated 234,079 total establishments by 2023, employing 2.5 million workers, and contributing $250 billion in output to the U.S. economy.