Question
Why should I franchise my company?
I've read so many articles lately from economists and entrepreneurs that any entrepreneurial based business (sole-proprietor in my case) should have the ultimate goal of selling their business. My investigations have indicated that I will only collect about 25% of what I would have collected in revenue during the purchase of my business, and I would collect a fraction of the shares for maybe 2 more years until the investors claimed full authority. Why would I want to do this? It sounds absolutely retarded! My ultimate goal is to become a multiple business owner, and I am on the verge of doing so as I am about to begin an expanded version of my current business under a new name. So what my business plan has consisted of is to hire a manager for my current business and pay them an annual salary while I still control the budget and collect on the additional profit. I just don't see why I should ever sell any of my businesses. Even if I create too many for myself to keep up with the budgeting I would hire an executive accountant to control the budgets while I focus my time on the development of something else. Can anyone advise me in another perspective as to why I should refrain from this plan and follow the suggestions of the experienced?
7 months ago - 2 answers
Best Answer
Chosen by Asker
The strategies to go franchising versus going for a conglomerate a la Richard Branson are very different. Franchising is in itself a seperate business model requiring a different type of management structure. It also requires you to prove (independently) that the franchisor will yield a return on their investment in line with your prospectus. This makes this for a type of public disclosure that you may not like. You come across to me as more of the conglomerate type than the head of a franchise empire but I could be wrong. The exit strategies could be expanded to float the businesses right up to full PLC status or deliberately build them to sell to an existing franchise specialist with various options on how you maximise your returns post the sale. Have fun!
by Greenth
7 months ago
Asker's Rating: 
Other Answers
If your franchise really takes off you could make a lot of money for very little effort. If you don't someone else could copy your business and call it something else and franchise it and if it takes off how will you every be able to expand.
by Flamenco nut- 7 months ago