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Weekly UpdatesHow you grow and develop your business can make or break you, so it's important to do the research, access your assets, maybe even speak with a consultant or adviser and strategically plan how and where you will expand.
There are three different methods of expansion when you franchise your business. You can open units in specific territories, spike interest by opening company-owned units or grow organically. Your concept, management abilities, capital and business goals should help define the way you expand.
Many franchises expand locally first. Determining a specific area close to headquarters will help you maintain tighter quality control over the first units, reduce your training and support costs, build a stronger local customer base and allow you to manage construction (for retail locations) at a corporate level. It will also be easier to approve new locations because you are familiar with your local market. The downside to opening units only in your local market is that it limits the amount of people who can open a franchise and the total number of franchises you'll be able to sell.
Companies with greater assets can plant a single, company-owned unit in areas with large growth potential. These corporate locations will market your concept and franchise opportunity while generating income. They can also be used as training facilities and eventually be sold to a franchisee to generate capital.
Other franchises decide to grow organically and let the demand for their concept determine their growth pattern. For younger companies, this method works best with concepts that need little training and support. This method has a larger customer base but it tends to be more expensive to train and support franchisees spread out nationwide instead of having units grouped together.
Don't forget about area developers. When you franchise your business, you can sell individual units or territories to multi-unit developers. Selling a territory will provide you with a significant amount of capital, but it will also reduce your control over choosing franchisees and possibly limit your control over training. Many larger brands do not sell individual units but offer territories to large investors.
As you grow, don't forget about the international market. Many concepts that work here will also thrive abroad. But before you fly across the Atlantic, you need the corporate structure and assets to run your global empire. Strategically plan the growth of your company, stay focused on providing quality products and service to your customers and franchisees, and watch your business grow!
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