How Successful Are Start-Up Franchisors?

2015 Facts & Figures Report Published on June 13, 2015

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As companies seek ways to expand, franchising is considered a successful business model to implement. Considering that the cost to franchise a business can require a minimum investment of $100,000 it’s important that the new franchise achieves success. It follows that a key question to ask is: How successful are new franchisors?

A significant difference is in the success rate of franchise systems with 10+ company-owned locations. One reason could be that the systems with company-owned outlets have a better understanding of the business operations and most importantly have the sustained revenues and thus capital to offset slow franchise growth.

For prospective franchisees, investments into new franchise systems without corporate locations can be a higher risk investment. A franchisor needs to be financially healthy and stable to achieve successful growth.

For franchisors and businesses interested in franchising, company-owned outlets play an important role in the success of your business. Creating your franchised business requires proper due diligence and a comprehensive feasibility study to ensure proper structure and development strategies are in place.

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About the Author: Jeff Lefler
As the CEO of FranchiseGrade.com, Jeff understands that there is no Silver Bullet or sure-fire, simple way to pick a guaranteed franchise system winner. However, by using a little science and a lot of hard work, Jeff and the team at FranchiseGrade.com have developed a sophisticated research, analysis and comparison model to help potential investors and existing Franchisees assess a realistic value for any franchise system relative to others. It's called a Franchise Grade. With over fifteen years of small business experience and ten working in franchising as a multi-unit Franchisee, consultant and Franchisee Association President, Jeff has a good understanding of the level of hard work, dedication and commitment that drives a successful franchise system. As part of his ongoing involvement with the industry, Jeff also served as a Member of the Strategic Committee of the International Association of Franchisees and Dealers. Get in touch with Jeff to see how your system measures up at jeff.lefler@franchisegrade.com.


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