Franchising Hits $2 Trillion
Anyone that seriously looks at the growth rate of franchising as a technique of promoting will agree that the growth has been phenomenal to say the least. Going back over 150 years back when frontman producing commenced offering distribution licenses to individual in the promotion, sales, coaching and repairs of their sewing machines, who would have thought franchising would be what it is today? Over 2,500 enterprises have expanded regionally, nationally or worldwide in the offer of their system of engaging in business.
Based on the present growth of franchising, by the year 2010, franchising will exceed $2 trillion. After the Fed. Trade Commission in 1979 enacted Rule 436 which needs a franchisor to provide full disclosure to a possible purchaser of a franchise, the FTC wanted to monitor the growth of franchising. Intensive studies were done and one dazzling fact that was unexpected was exposed. The failure rate was only 3.7% in franchise businesses. The question was asked why so low?
the answer's very simple. Franchisors spend a huge amount of time improving their system of conducting business and documenting every aspect of the business so that franchisees benefit. Franchisors build their'Marks' so that the public becomes informed concerning the services and products of the business. Most significantly, the Franchisor screens and qualifies each individual who makes an investigation into the franchise business. A Franchisor has a profile of who they want as a franchisee. Not everyone can qualify or fit the profile. These individuals aren't awarded the franchise.
Once a franchisee is selected a powerful coaching program is provided that offers both lecture room and hands on coaching. Each aspect of the business is presented in detail from pre-opening assignments, inventory control, accounting, advertising, promoting, hiring, daily procedures, buying kit and supplies and much more.
to enforce the coaching, the Franchisor loans a copy of the operations manual to the franchisee. This manuals contains everything associated with the business from ad layouts to forms, directions for apparatus, and step by step procedures in the operations of the daily business. The Franchisor's operation manual can be several hundred pages to well over 500 pages. Some Franchisors provide pre-opening manuals, promoting manuals, and employee manuals.
in addition, to the coaching program and operations manual a franchisor will even be present for two to five days when the franchisees business is ready to open its doors for business. This support gives the franchisee a comfort zone for his business.
After the business has operating for several months, the Franchisor will visit the franchise operation to make sure that procedures are being followed and the business is maintaining the image the Franchisor wants projected.
The new trend in franchising according to Profran Consultants' Founder and President, Ken Hollowell is service franchise businesses that are extremely low level entry franchise businesses that allows the franchisee to telecommute. Mr. Hollowell described one special company he's related to called
Skadoit. Skadoit offers remote online PC data backup services and has captured the eye of many folks related to the franchise industry. Many are describing the franchise with one word,'WOW!'.
Profran Consultants, Inc. Is a franchise consulting and development company that works with a selected number of entrepreneurs wanting to become franchisors. To learn more about Profran advisors
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