Franchising offers a fast track to significant business growth. But franchising requires experience, knowledge & careful setup if it is to be successful.

Business owners looking to expand locally, regionally or nationally have two options: Open up company-owned units, which involves considerable cost and resources, or franchise. But franchising, while it sounds easy and often allows businesses to grow rapidly, doesn’t always lead to successful business growth.

Franchising expert Derek Cafferata from All State Franchise Finders has more that 30 years’ experience in the franchising industry, both throughout the U.S. and across the globe. He understands the importance of building the right foundation from which to successfully franchise from.

“Franchising is one of the most successful and most popular ways to grow a business,” says Derek. “But trying to franchise without the right knowledge, experience, set-up and support usually ends in failure, at significant cost and frustration to the hopeful franchisor.”

Derek works with many potential franchisors, helping them through the process of setting their business model up for successful franchising potential.

A Brief History of Franchising

Franchising is considered one of the most significant developments in modern business. However, the concept of franchising first originated back in the Middle Ages, when high church officials were able to sell goods at market in return for paying a fee to government officials and Lords.

During the Colonial Period, the franchising concept further developed, with landowners allowing individuals to sell at market and offer various services in return for a royalty fee. These individuals were often offered a protected territory within which they could run business and collect fees for their goods and services.

The idea of spreading a specific trade name dates back to the 1840s when a German beer company allowed local taverns to sell their particular beer, with the rule that each tavern had to use the specific beer brand name, a brand name that is still in existence today.

Singer was one of the earliest companies to introduce a franchise plan in the 1850s with their sewing machine sales. John S. Pemberton followed with his franchise concept, a sugar-based drink concoction that came to be known around the world as Coca-Cola.

Modern franchising established itself as a realistic business model in the U.S. in the 1940s following World War II. McDonalds, one of the most successful franchises ever, revolutionized the concept of restaurant dining. In the 1960 and 1970s franchising really began to take off as a concept across a wide range of industries. Entrepreneurs really clicked onto the concept of franchising during this period as more and more business owners began to warm up to the franchising concept for successful growth and branding.

Franchising Success in the U.S.

Considering there are over 3,000 franchise brands in the U.S. with over 780,000 franchise units, it is easy to see how successful the franchising model can be for business growth.

While the Global Financial Crisis (GFC) of 2008-2010 saw business across the board drop, franchising has seen positive and constant growth in all areas from 2011 onwards. Direct employment from franchise units in the U.S. currently sits at almost 9 million employees.

“Franchising is a business model that suits so many people from all walks of life,” says Derek Cafferata. “I work with people of all ages, including young Millennials, with all sorts of education backgrounds and qualification, from a wide range of industries.” Statistics show that more than 20 percent of franchises in the U.S. are owned and operated by women, with 43 percent being co-owned by men and women, and one in seven franchises are owned by veterans.

Franchising to Transform Your Business

Franchising offers three great benefits to the company looking to grow. Firstly, the franchising model offers cost effective expansion.

According to Derek, one of the most significant benefit franchising offers over company-owned unit growth is cost efficiency. “Effective franchising offers significant cost savings for the franchisor,” says Derek. “When you develop an efficient and effective franchise plan, the right people will get on board and run with your brand.”

The franchisee pays an upfront cost to pay for the costs associated with opening a new location. This means the franchisor does not need to tap into company finance and resource in order to grow.

Secondly, franchising opens up opportunity for the company to access entrepreneurial talent they may not have access to via traditional employment opportunities.

“The right franchisee will blend well with the corporate business branding and model,” says Derek. “Franchisees usually pay significant up-front costs, taking responsibility for successful growth of their unit or franchise territory.”

The third benefit of franchising is that it offers little risk for the franchisor. The franchisee takes on the financial risk of opening a new location, along with employment and day-to-day running costs and responsibilities.

“Percentage return from a new franchise location is high and has the potential to offer significant financial reward over the long term with very little risk,” says Derek.

All State Franchise Finders Your Franchising Experts

All State Franchise Finders are the franchising experts, able to assist anyone looking to franchise anywhere throughout the U.S. With decades of experience, they offer the knowledge, experience and support you need to make the move to successfully franchising your business now. No matter your business size or industry, contact Derek and his team at All State Franchise Finders on 1-800-544-2161 or visit allstateff.com today.