Franchising and Opening Locations Simultaneously

Open More Locations OR Franchise, Which Is It?

As you know, franchising has been a catalyst of growth for businesses for many decades now. One of the obvious reasons why a business goes the route of franchising boils down to resources. By resources we are referring to money and talent. Let’s face it, franchising is centered on the idea of using other people’s money and talent to brand a business in another market. In most situations the average business owner does not have enough financial resources to open more company-owned locations in other markets quick enough.

But what if a business still wants to slowly open more company-owned locations while also franchising. Can a business that offers franchises also continue to open company-owned locations? Yep sure can…let’s take a closer look.

The logic behind franchising is quantity. The ultimate goal for any business that franchises is to have a presence in different markets. Whether it is a service based business, mobile business, fitness, retail, etc. typically if the business is successful in one market then it is a strong indicator that there’s a demand for it in other markets. Becoming a known brand (regardless of the type of business, product or service) requires a local presence. By far the best way to command a local presence is to be there.

Luckily franchising does not have to be an all or none solution. Once a business is franchised there is NO requirement to stop or to continue opening company-owned locations. It is not uncommon for franchisors to offer franchise opportunities for start-ups while also continuing to open additional company-owned locations. In fact, this practice is encouraged.

What Do You Mean It’s Encouraged?!

You may wonder why we would make a statement that it is encouraged to continue to open company-owned locations while also seeking operators to start-up their own franchise. The answer is easy and this practice has been done for many years. The benefit is because company-owned locations (once up and running) can then be sold as a franchise later as a turn-key business thus commanding a larger buy-in cost for the franchisee. The details for how this plays out can be a little complicated but definitely doable.

Bottom line, the answer is YES only if it makes sense. This is simply a strategy used by some franchising companies. It should also be noted that it is not necessary to have more than one location in order to franchise a business (see our article on Requirements to Franchise Your Business). So if someone you know has been holding off on franchising because they want to open more company-owned locations, share your knowledge about franchising and have them Contact The Franchise Maker.  We will be happy to explain the benefits of opening more company-owned locations while also offering franchise opportunities.

Franchising and Opening Locations Simultaneously