The Franchised business offers a great deal more stability and security than an independently run business. It is also a proven method for expansion and development over the long haul. Franchising in recent years has become a major part of the American economy. Franchised businesses now account for one third of all retail sales, more than 590 billion dollars annually. There are approximately 500,000 franchise outlets employing more than 7 million people. The American concept of franchising is expanding rapidly around the world.
The overwhelming success of franchising is not based on any secret formula but rather on ingenuity and hard work. Franchising means creating and developing a concept or service that is needed by millons of people, developing the concept into a complete system of doing business than can be taught to others and then reproducing the franchised business over and over again. The franchisor applies his expertise, experience and capital to develop a trademark and a complete system of doing business. The franchisee receives training and assistance in the set-up and operation of the business and further receives on-going access to research, development and marketing support of the franchisor for which the franchisee pays a franchise fee and royalties.
The reason that franchised businesses are still operating after five years, ten years or even longer is because of the unique combination of all the right elements that businesses need to grow and prosper – good ideas, stable management, thorough training, long term commitment, a good source of capital and a lot of hardworking, like-minded people. As the governments and multi-national corporations of the world look around for solutions to the pressing economic problems of these times, they would do well to study the American way of franchising. We have an impressive track record.