After working hard to grow your business and make it successful, you’re beginning to think about setting up a franchise. Franchising has always been a popular way to expand a successful business beyond its original geographic footprint, with good reason. Business owners simply can’t run dozens of locations, but offering franchise opportunities to other aspiring entrepreneurs is good business sense. It’s a great time to work on setting up – or purchasing – a franchise, as this business model continues to grow in popularity.
The popularity of franchise business models
Franchise models are popular among both franchisors and franchisees. For franchisors, this model allows for virtually limitless growth and skyrocketing revenue without worrying about taking on debt in order to fuel that expansion. Franchisors are using the financial resources of the franchisees in order to expand the company while limiting their own potential liability. Furthermore, business owners who decide to set up multiple locations on their own are faced with the unpleasant task of trying to hire, train, and retain managers to operate those locations. In contrast, franchisees are already highly motivated individuals who want their locations to succeed.
For franchisees, choosing to buy into an established brand is a no-brainer compared to attempting to launch a new brand on their own. The established brand provides them with instant name recognition, extensive marketing capabilities, a proven system, and training resources.
How have franchises fared during pandemics and recessions?
For these reasons and more, franchises have been growing in popularity for quite a long time. In recent years, all types of business owners have faced challenges due to the pandemic and the threat of a recession. Yet, the franchise business model has held strong. Consider the following statistics from the 2022 Franchising Economic Outlook report published by the International Franchise Association.
• In 2021, franchise output grew by over 16% for a total of nearly $788 billion.
• In 2021, franchisees increased their hiring by 8.8%, adding more than 46,000 jobs to the economy per month.
• In 2022, the growth rate for franchise locations is expected to be 2.2% (over 792,000 franchise locations compared to about 775,000 in 2021).
It’s clear that franchise businesses have rebounded well from the pandemic, when many franchise restaurants, retail stores, and other types of businesses had to shut their doors or operate under reduced/modified circumstances. How exactly have franchises proved so resilient to adverse conditions? One reason is that, unlike individually owned businesses, franchise businesses share one thing in common: robust, well-established, time-tested infrastructure. Because of this, franchise businesses can withstand not only pandemics, but also economic recessions.
You’ll still need expertise to make your franchise business successful
As popular as franchises are these days, they still require quite a bit of work to set up and market successfully. For best results, contact franchising experts who can provide franchising services ranging from consulting to lead generation to marketing and beyond.
Pinnacle Franchise Development offers a full spectrum of services to elevate franchise brands. Contact our experienced industry professionals today to find out how we can help fuel your success.