Franchising has an ever growing appeal with ever more enterprises deciding upon it as the model for growth. Different businesses do it for alternative good reasons, but you'll find some primary strengths that franchising has to offer and which are at the heart of the decision to franchise for the majority.

Here we look at the seven most common factors people choose to franchise their brand.

Funding. No other method for business growth can provide the type of success that franchising can for so modest funding. The key obviously is that it is pretty much self funding given that business units are opened by franchisees who introduce their own capital to get their unit running. On that basis it is possible to build a regional, national or even international business at a tiny fraction of the cost it would take a organization if it were to do the same on a wholly owned basis. And needless to say, the bigger the cost of opening each unique unit, the more this applies. This likely explains the increased burst of focus there has in franchising since funding for small to medium sized companies has turn out to be far more difficult in recent times.

Pace of expansion. Franchising permits firms to expand more rapidly. Partly again this is due to the fact it could be achieved with much less capital. But also, rather than have a single team dedicated to setting up new units 1 at a time, with franchising you may have an army of franchisees out there looking for premises, negotiating leases, planning shop / vehicles fit outs, ordering inventory and the many other items that a brand new unit has to complete.

Motivated people. This one won't require much thinking about. Who do you think will push harder to accomplish good success in their business unit, an employee or a self employed franchisee whose monetary wellbeing is tied up in the business unit? This is why companies that convert company owned units to franchises frequently see an enhancement in revenues overnight.

Marketing costs and momentum. Ordinarily the franchisor and also the franchisees might both contribute to the advertising and marketing effort. As an example the franchisees may perform advertising at a neighborhood level to compliment what the franchisor is carrying out nationally. For the franchisor it signifies that the financial burden of marketing and advertising is being shared together with the franchisees and enhanced market penetration could be attained on a neighborhood level.

Local understanding. An continually quoted mantra in franchising is that its power comes through the mix of a national brand name operated by men and women with good local awareness. It is a successful combination that helps out compete big competitors.

Entrepreneurship. If a company isn't heading forwards it is heading backwards compared to its competitors. Franchisees provide a never ending resource of new ideas that may assist a company keep ahead of it's rivals.

Decreased exposure to failures. No matter how much all of us wishes every single person that ever goes into business to be successful, failure is actually a fact of business life. As a franchisor, the business is protected from the worst impacts of having a unit that fails.