As someone running a business, you understand more than most how difficult it can be to sustain a profit and grow your business. One thing that may not have crossed your mind as a route to expansion is Franchising. Franchising is a way of expanding your existing business rapidly, and in a cost effective way, or alternatively, you can expand your current business empire by buying into a franchise with a proven brand that has a simple and set formula for success. Franchisees are attracted to the opportunity to own and operate a proven business concept with training and support. But what are the benefits for you as the franchisor? Network Growth Franchising often enables companies with one or a few locations to quickly establish a national presence within a few years, achieving a rate of network growth which would be inconceivable through company-funded development. The resources you will need to contribute to the opening of a franchised outlet are far less than if you were opening a company-owned store - the franchisee funds the premises, lease acquisition, and fit-out, recruits and trains the staff, and implements the local marketing campaign. This enables you to develop a compact management base focused on assisting multiple franchisees to launch their business simultaneously, rather than methodically opening store after store, and sourcing new start-up capital for each. Motivated Localised Management By granting a franchise licence you are placing a business under the ownership of an individual with specialist local market knowledge who is in essence his or her own boss. Their earnings depend entirely upon the success of their own endeavours, as opposed to a salaried manager whose earnings - discounting bonuses - are unrelated to their performance. Also, the Franchise Agreement includes a clause preventing the franchisee from leaving and using your business concept and systems to set up in competition for a significant period of time, whereas a staff member is often under no such restriction. Fair Capital Return Franchisees pay an initial investment to purchase a franchise, most of which will be to cover the costs involved in franchisee recruitment, training, perhaps initial equipment, and launch support. Your true financial incentive will be the ongoing Management Service Fee, which is a percentage of the franchisee's turnover paid to cover the costs of ongoing support, product research and development, national marketing campaigns, etc, plus to provide a fair reward for the use of your intellectual property and ongoing efforts. Because there is less capital employed, your profits are generated on a much lower capital investment. Although the revenue received from franchised units is logically less than that from 100 per cent company-owned outlets, a higher percentage of the revenue is actual profit. By taking the franchise route you cut overheads and, unencumbered by staffing and administration issues, can focus more time on developing the business. By speeding up expansion your business network achieves higher economies of scale earlier, stronger brand awareness, is much sooner able to challenge for national contracts and, in the case of a fledgling market, is in a much better position to capture early market leadership and establish a dominant position over competitors.