What's In It For The Franchisor?

There is a are many misconceptions when applying for a franchise.  First is the mind set that we have when we come over to the interview with the franchisor.  We seem to forget that getting approved as a franchisee would also benefit the franchisor in several ways.  So here are a few facts on what’s in it for them so that when you go into that interview you know the worth you are bringing into the organization.

The first and most tangible benefit to the franchisor is that you get to expand his business when you set up shop under his franchise system.  Of course, without any strenuous effort and a lot of time on his part, he gets a percentage of your monthly earnings as well as a hefty up front fee.  So much like any other business, moving into a franchise system would entail you to spend an initial capital to cover not just your infrastructure, equipment and manpower expenses but also your training and integration into the franchise system.

Moreover, the business expansion of your franchisor is done without the frustrating task of managing day to day operations.  As you are more or less a partner in this venture, your vested interest in the success of the business would see you work as hard as possible to get it off the ground.  So in effect, he teaches you the ABCs of running the business, gives you the right to use his business name, hands to you his business card should you have any questions and sits back to wait for your monthly payment.  This is definitely a nice deal for him as all along it will be you who will be doing all the working.

Another advantage of having you as his franchisee is the fact that he gets to expand his business without shouldering the capital risk.  Of course every business has its risks, but in this case, his relationship with you is a one way win-win situation should things turn out for the worst.  Think about it, you pay him outright cash at the beginning of your relationship.  He gives you the ABCs and other stuff you will need, should the business fail you are a lot of money short of what you have started with and he is much better off than he was before your relationship.  Bottom line is, you as the franchisee risk all while he risks nothing.

One other thing he will be thankful for in having you as a franchisee is that he does not have to go through the pressure and frustration of looking for qualified and motivated people to staff his organization.  You yourself and your determination and motivation to regain the capital you have invested in the project will be sufficient motivation for him to regard you as a loyal and hardworking manager of his business’ expansion.  Think of your initial capital outlay as a guarantee that you will work even harder than the most highly paid executive in any company.

Of course, having you as his franchisee would also mean that he has yet another additional consumer for the products that he sell.  Namely the raw materials or the finished product all the franchisees sell under the system.

So what’s in it for him?  The answer is a lot!