{"id":9801,"date":"2021-06-16T14:17:56","date_gmt":"2021-06-16T13:17:56","guid":{"rendered":"https:\/\/www.franchiselocal.co.uk\/news\/?p=9801"},"modified":"2023-10-09T12:14:29","modified_gmt":"2023-10-09T11:14:29","slug":"can-franchising-grow-in-the-long-term","status":"publish","type":"post","link":"https:\/\/www.franchiselocal.co.uk\/news\/can-franchising-grow-in-the-long-term\/","title":{"rendered":"Can Franchising Grow in The Long Term?"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>In 2021, franchising is bigger news than ever but, despite this, there are a few myths about this unique business model and if franchising can grow in the long term which need busting.<\/p>\n<p>One of these myths is that, although <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/franchise-meaning-in-business\/\">franchising<\/a> can be a money-maker, it falls flat as a long-term business growth strategy. The people proliferating this myth tend not to be franchise owners, and, in reality, this couldn\u2019t be further from the truth. In this article, we\u2019ll take you through the compelling evidence that shows that franchising is a high growth solution for today, tomorrow and well into the future.<\/p>\n<h3><strong>A chain reaction<\/strong><\/h3>\n<p>Franchising is the act of buying into an established company in order to gain the benefits of <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/how-to-scale-up-a-small-business-with-franchising\/\">owning your own business<\/a> without the inherent risks of starting from scratch.\u00a0 For a business owner (the <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/franchisor-and-franchisee-relationships-in-2021\/\">franchisor<\/a>), this means that they\u2019re able to expand their business nationally and internationally at a faster rate than they might otherwise manage.<\/p>\n<p><a href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-franchise-business\/\">Franchising<\/a> has been around since the mid-1800s and, while you will have heard of some of the larger franchise companies like <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/a-closer-look-at-the-most-profitable-franchises-in-the-uk\/\">McDonald&#8217;s and Starbucks<\/a>, these are just the tip of the iceberg of what is a worldwide revolution in business models.<\/p>\n<p>Let\u2019s get something out of the way straight away &#8211; not every company is suitable for franchising.\u00a0 The following are examples of companies that may not be the best fit for franchising:<\/p>\n<ul>\n<li>Businesses selling a product or service which may only have short term appeal.<\/li>\n<li>Businesses in niche markets in specific geographic areas.<\/li>\n<li>Business with a lot of legislation and regulatory issues.<\/li>\n<li>Business with limited capital and limited access to credit.<\/li>\n<\/ul>\n<p>While it\u2019s possible for businesses like these to pivot to a <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/is-a-franchise-a-good-idea-to-start-up-a-business\/\">franchise model<\/a>, it may take a lot of money, effort and changes to make them work.<\/p>\n<p>So, now that we\u2019ve got that straight, let\u2019s take a look at the businesses that are <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/2021-and-the-franchising-boom-for-work-from-home-franchises\/\">super compatible with franchising<\/a>:<\/p>\n<ul>\n<li>Companies that have a recognisable and respected brand.<\/li>\n<li>Companies that have a compelling sales proposition.<\/li>\n<li>Companies that have a repeatable model.<\/li>\n<li>Companies that have a tried and tested business process that can be transferred to any location.<\/li>\n<\/ul>\n<p>As you can see, the two franchise big hitters that we\u2019ve mentioned fit perfectly into this model &#8211; as do many many others.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-9803\" title=\"short mid and long term\" src=\"https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term.jpg\" alt=\"short mid and long term\" width=\"1200\" height=\"672\" srcset=\"https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term.jpg 1200w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-300x168.jpg 300w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-1024x573.jpg 1024w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-768x430.jpg 768w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-150x84.jpg 150w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-600x336.jpg 600w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-696x390.jpg 696w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-1068x598.jpg 1068w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-750x420.jpg 750w, https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/short-mid-and-long-term-20x11.jpg 20w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<h3><strong>The long and the short of it<\/strong><\/h3>\n<p>All of this brings us to the main point of this article &#8211; the long term growth prospects for franchised businesses.\u00a0 Even during challenging times such as recession and, say, a global pandemic, a great many franchise businesses continue to experience robust growth.\u00a0 One reason for this is that many franchise businesses trade in everyday items such as coffee, car hire and candy &#8211; items that consumers will continue to buy even when times get tough.\u00a0 The COVID-19 pandemic did, of course, present some unique challenges to high street businesses.\u00a0 Despite this, demand for investments within franchising saw an uptick of a whopping 35% during the pandemic.<\/p>\n<p>If the franchise industry can drum up that kind of interest in the face of adversity, how about during more peaceful times?\u00a0 The leisure and fitness franchise, Anytime Fitness, was launched in 2002, and, since that time, it has opened <a href=\"https:\/\/www.anytimefitness.co.uk\/own-a-gym\/\" target=\"_blank\" rel=\"noopener\">4,5000<\/a> clubs across 35 countries and continues to grow with a new member joining every three minutes.\u00a0 If that doesn\u2019t demonstrate the potential for longevity in franchising, let\u2019s take a look at some other examples:<\/p>\n<p><strong>1940<\/strong> &#8211; Dairy Queen opened its first-ever store &#8211; 81 years later, the company now has over 4,800 franchise stores across the USA alone.<\/p>\n<p><strong>1940<\/strong> &#8211; The world\u2019s favourite burger chain, McDonald&#8217;s, opened its very first restaurant. The company now has over 39,000 restaurants across the globe.<\/p>\n<p><strong>1930<\/strong> &#8211; Kentucky Fried Chicken (commonly known as KFC) began its finger-lickin&#8217; good franchise and has never looked back since &#8211; in fact, a further <a href=\"https:\/\/www.statista.com\/statistics\/256793\/kfc-restaurants-worldwide-by-geographic-region\/\" target=\"_blank\" rel=\"noopener\">896<\/a> outlets were opened in 2020, during a global pandemic.<\/p>\n<p><strong>1948<\/strong> &#8211; Dunkin\u2019 Donuts &#8211; This popular sweet treat provider started franchising in 1955 and continues to go from strength to strength.<\/p>\n<p><strong>1969<\/strong> &#8211; Wendy\u2019s &#8211; Another fast food outlet, Wendy\u2019s now has over 6,650 restaurants worldwide.<\/p>\n<p><strong>1971<\/strong> &#8211; Starbucks &#8211; One of the world\u2019s most famous franchise companies, today, you can\u2019t walk down a street without seeing this coffee giant\u2019s famous logo.<\/p>\n<p><strong>1965<\/strong> &#8211; Subway &#8211; Sandwich supremo Subway is now a high street staple in 2021.<\/p>\n<p>All of these world-famous franchises have a couple of things in common:<\/p>\n<p><strong>Keeping it simple<\/strong> &#8211; Each of these long-running companies offers simple products that have a far-reaching appeal.\u00a0 The secret of success for a franchise is not to make your offering overly complicated &#8211; instead, find a product that has universal appeal and is affordably priced.\u00a0 For this reason, it\u2019s an excellent idea to avoid anything too trendy or too luxurious when looking for a franchise business.<\/p>\n<p><strong>A passion for product<\/strong> &#8211; Not a single one of the companies listed above set out to become a franchise; they just wanted to open a business that offered good quality, affordably priced products.\u00a0 The tip here for those looking to start a brand new business is to focus on that business as a standalone rather than starting a business to achieve world domination through franchising.<\/p>\n<h4><strong>So, how do you create a long-lasting franchise business?<\/strong><\/h4>\n<p>While there is no secret formula to <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/is-a-franchise-a-good-idea-to-start-up-a-business\/\">the perfect franchise business<\/a>, there are a few things that you can do to give your business the best chance possible:<\/p>\n<p><strong>Give it time<\/strong> &#8211; many people make the mistake of trying to franchise their business too soon.\u00a0 You need to make sure that your business has been running successfully for long enough for you to assume that it will continue to do well.<\/p>\n<p><strong>Watch the wonga<\/strong> &#8211; In order to be an attractive proposition for a franchisee, you need to be able to present evidence that your business <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/writing-a-franchise-business-plan\/\">generates enough revenue<\/a> to make it worthwhile.\u00a0 Take a long hard look at your return on invested capital before thinking about making a move to franchising.<\/p>\n<p><strong>Avoiding obsolescence<\/strong> &#8211; The product or service you have may be great right now but, what about in five years? Or ten?\u00a0 Nothing says \u2018out of business\u2019 quicker than a brand based on a fad or trend, which will be history in a few months.<\/p>\n<p><strong>Recession reality check <\/strong>&#8211; When it comes to <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/will-franchising-die-out-as-a-business-model\/\">franchising<\/a>, the secret sauce is finding a product that people will continue to buy even during an economic downturn.<\/p>\n<p><strong>About-face<\/strong> &#8211; Avoid basing your business around a person in terms of having a \u2018face of the business\u2019.\u00a0 Fast-food chain Wendy\u2019s made this mistake when it focused on the founder, Dave Thomas, in its marketing and advertising.\u00a0 When Dave sadly passed away, the brand struggled to maintain its success without this part of its identity.\u00a0 Interestingly, before his passing, Dave apologised to his daughter, Wendy, for naming the business after her &#8211; acknowledging that it put a lot of pressure on her to continue the brand&#8217;s success.<\/p>\n<p>As we circle back to the title of this article, I think we\u2019ve demonstrated that not only is <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/will-franchising-die-out-as-a-business-model\/\">franchising a tremendous long-term prospect<\/a> but, it\u2019s also a safer bet than any other kind of business model &#8211; as long as you follow the golden rules.\u00a0 Franchising is a fantastic way of signing off as an employee and starting your journey as a business owner without the pitfalls and risks of going it alone.<\/p>\n<p>The key to success is all in the product or service &#8211; if it\u2019s something that people want, can afford and, are likely to still want in five or ten years, then the chances are good that you\u2019ve found a business that will secure your future &#8211; and even that of future generations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In 2021, franchising is bigger news than ever but, despite this, there are a few myths about this unique business model and if franchising can grow in the long term which need busting. One of these myths is that, although franchising can be a money-maker, it falls flat as a long-term business growth strategy. The [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":9802,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1467],"tags":[],"class_list":["post-9801","post","type-post","status-publish","format-standard","has-post-thumbnail","category-franchise-information"],"acf":[],"jetpack_featured_media_url":"https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/06\/Can-Franchising-Grow-in-The-Long-Term.jpg","_links":{"self":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/posts\/9801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/comments?post=9801"}],"version-history":[{"count":0,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/posts\/9801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/media\/9802"}],"wp:attachment":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/media?parent=9801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/categories?post=9801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/tags?post=9801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}