When deciding to franchise your business, it is essential to weigh the pros and cons of such a move appropriately. This article will discuss some of the pros and cons of franchising your business.

According to Statista  [Franchising in the U.S. – statistics & facts | Statista], in 2020, an estimated 753,700 franchises establishments in the United States. These franchise businesses’ output was $670 billion and employed 7.5 million people. After reading such statistics, this could move any business person to want to set up a franchise; however, weighing the pros and cons of such an action is good business practice. An important step in deciding on franchising your business is to contact a franchise law attorney to discuss the legal aspect of franchising your business.

Some of the pros of franchising your business include the following:

• · Business growth – the franchising model, is a cost-effective way of growing and expanding your business. It allows you to set up additional locations for your business at a lower price. This is because franchisees cover setting up a franchise unit, thus covering the setup costs. In addition, franchisees provide ongoing income to the business by paying franchise fees and royalties.
• · Motivated talent – a franchisee runs their business, unlike a manager running another branch. This is an advantage because the franchisee is vested in their business. As a result, they are likely very motivated and hard-working compared to a typical manager. Franchising allows committed and enthusiastic people to run their franchisees as they are their businesses.
• · Low-risk expansion – the traditional way of expanding one’s business requires the business to single-handedly finance, choose and run these branches in different locations. Such an action has a significant financial risk on the business and often results in sleepless nights for the business owner. However, with franchising, returns are seen for a much lower risk. This is because the franchisee invests their money in the new business branch/location (i.e., franchise unit). The only thing required of the franchisor is to provide training and ongoing support, which is a minimal investment to receive royalties from the new business.
• · Possibly no economic downturns – franchises may have a higher chance of surviving a recession as compared to other businesses. Some of the reasons are that: 
  • – the franchise units are run by entrepreneurs who are enthusiastic and motivated 
  • – the franchisors may have lower overheads and debt as compared to an independent business owner 
  • – Franchisees attract customers by relying on a proven business model and recognizable brand

While there may be several pros, there are also some cons to take into consideration:

• · Time and money – To reap the benefits of a franchise business, you must be prepared to work hard at the outset to develop a profitable franchise business model. There are many documents required at the initial stages, such as training manuals, marketing materials, and legal documentation. As a result, it takes up a lot of time and money.
• · Franchisee recruitment – unlike dealing with employees, franchisees have a level of autonomy. Therefore, you have less control over them as you would employees.