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Franchise & Business Opportunity News

Franchisors Reveal the Key to Business Success

Written on March 29th, 2007 by Joseph in Franchise Industry.

In 1994, chief executive of the Tan Company, Todd Beckman, planned to build his tanning business by using a simple initiative: start small, cultivate and then expand. His original expectation was just to have 3 stores but it just took off! He went from owning 3 locations to now having over 25 salons that he still owns and operates. In addition, he currently boasts more than 72 locations operating in 12 states. Since turning to franchising, they are on the fastest growth pace in the history of the company. Today they boast an annual revenue of over $35 million!

Yes, when Todd decided to franchise his business, he experienced incredible growth!

Companies who boast a business model that can be replicated have 2 ways in which to grow. They can either add locations, financing each expansion themselves and taking full ownership of the new operations. Or, they can find partners to open franchises under the company name. The franchise partners pay a fee to the company, and in return obtain access to its business model, products and marketing and advertising tools.

Franchising has many benefits and can help companies defray the cost of expansion, which can lead to faster growth. In addition, the franchisee does most of the work. These franchisees are driven by their own investment in the store and therefore improve the chance of success for your business.

It has been recently reported that there are over 2 500 franchisers nationwide.

Big entrepreneurs and successful franchisors now report some key tips:

The key for franchisers is to start out with 2-3 stores in order to create that franchisable business model. Once you have created that success, then you can replicate it over and over again. The important thing is to develop the business model until it succeeds and can be replicated by others with success. Start small first.

The next important step franchisors should take is to keep the franchise concept simple. The worst thing you can do is to create something that is difficult to operate. Therefore, a franchiser must have a system that gives each location the right level of management and control for the business to run smoothly.

Yet, franchising is not without any complexities. This includes federal rules enforced by the Federal Trade Commission in a document called the Uniform Franchise Offering Circular. The UFOC is the first document a potential franchisee sees before an agreement between both parties is signed. Franchisors say that it is a rather long, laborious task and involves plenty of legal work. So, get a franchise lawyer to help you out!

Yes, it has been researched that more and more entrepreneurs are turning to franchising to grow their business. These top franchisors have revealed their secrets, all you have to do is follow them.