Franchising has now been going strong for more than 50 years. Why does it work? For would-be franchisors, it is a way to expand with other people’s money and human resources. For franchisees, it is a way to get into business without having to reinvent the wheel or go it alone. Of course, like any business venture, there is no guarantee of success for either franchisor or franchisee, and each should understand what they are getting into before setting out on this path.
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We often talk to people who were told they could avoid the regulations of franchising if they simply granted a “license,” or entered into a “consulting agreement,” with a person who approaches them about opening a similar business. Be very wary of such advice; in most cases, these are unregistered franchises that can expose you to significant liability. As they say, “if it quacks like a duck…”.
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Entrepreneurs who have created a successful brand and business and that are considering franchising their business often fear giving up control to franchisees who may not operate their franchised business with the same level of dedication and care that the entrepreneur had in operating their location. Building the brand required the entrepreneur’s blood, sweat, and tears.  However, franchisors will need to give up day-to-day control to franchisees, and they can do so without losing control.

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