How to Grow a Franchise

Mantis Funding August 08, 2023

How to Grow a Franchise

Franchising is a well-established method for scaling a business. If you’re a business owner ready to take the next step to catapult your reach, then franchising might be just the golden ticket you need. All you have to do is submit a Franchise Disclosure Agreement. This agreement allows eligible entrepreneurs to replicate your business model while complying with your specifications.

Franchising allows you to clone your success and plant its seeds in new territories. In other words, you can simultaneously expand your brand’s footprint and create new revenue streams by franchising your business. Franchisees help perpetuate your business’s success, carrying forward your established business ethos while giving fees and royalties back to you.

In this blog, we’ll explore the ins and outs of franchising, providing helpful tips for business owners ready to take their business to new heights.

1. Ensure That the Timing Is Ideal

You’ve heard it before about all things business: timing is everything. However, when deciding to franchise your business, timing doesn’t just boil down to external market conditions; it also depends on your company’s internal readiness.

The first step to knowing if now is the right time to franchise your business is to review your financial performance. Understand that a comprehensive financial assessment is the backbone of a successful franchise model. A common misstep many businesses make is rushing into franchising without fully grasping the financial implications. Moving too fast now could lead to you fixing costly mistakes later on.

Next, you’ll want to assess your business’s readiness for replication. Focus on operational systems, unit-level economics, and quality control measures. Are they scalable?

Also, be sure to gauge your standing within the industry. Be honest and ask, are you a market leader or innovator? Does your business offer a unique value proposition that can significantly boost your appeal to potential franchisees?

If the answer is no to any of these questions, now might not be the right time to pursue franchising.

Finally, reflect and meditate on your readiness as a founder. Franchising is not merely about multiplying outlets; it’s about overseeing a network while consistently upholding your brand’s vision and values. Franchising means a significant shift in role that requires a clear vision for your brand across various locations and markets.

The art of timing in franchising is about alignment – between market conditions, your business’s readiness, and your preparedness as a founder. When all these are in place, you’ll know it’s the perfect time to franchise your business.

2. Develop a Strategic Budget Plan

Developing a strategic marketing and recruitment plan is crucial when considering franchising your business. While expert opinions vary on the exact capital needed for a successful franchise launch, it’s essential to allocate a considerable portion to your marketing initiatives. A well-planned marketing program could demand an investment of well over $100,000 in the first year alone; however, its returns can significantly contribute to rapid franchise growth.

It’s also important to allocate funds wisely for franchisee recruitment, aiming for diversity in your sales efforts to maximize profitability. Many franchise sales organizations (FSOs) rely heavily on consultant networks, offering low-risk leads without needing substantial upfront capital. However, this method typically involves paying a consultant fee on top of the FSO’s percentage, which may limit the returns on initial franchise fees.

For this reason, a multi-pronged approach can provide the best return on investment. Incorporate consultant networks into your strategy, but don’t forget to invest in digital marketing efforts. Digital channels can provide a broader reach and higher returns on your franchise fees.

When you’ve effectively communicated the value of your franchise—why choose your business and why now—you’ll increase traction on the digital side, creating a more balanced and profitable marketing and recruitment strategy.

3. Identify Your Unique Differentiators

Finding the things that make your brand stand out from the competition unique is the cornerstone for successful franchising. Many new franchisors believe their brand lacks distinctive traits compared to competitors; however, in many instances, each brand holds a unique proposition that sets it apart, even in a crowded marketplace.

Embarking on a comprehensive analysis of your business, industry, and brand story is essential to uncovering these unique elements. Implement tools like SWOT analysis to dissect your business’ strengths, weaknesses, opportunities, and threats. Delve deeper into your brand’s history – the founder’s story, the motivation behind the brand, and how you engage and add value to customers. While these attributes may seem intangible, they form the core of your unique brand proposition.

If you’re struggling to pinpoint what makes your business distinct, it may indicate that franchising might not be the right step right now. Finding a unique differentiator, which could be as intrinsic as the founder’s vision or your specific business approach, is crucial for franchising readiness. Without this differentiation, your franchise might blend into the background in a saturated marketplace, meaning you should take the time to identify and amplify your brand differentiators before entering the competitive franchising arena.

4. Focus on Organic Growth

Consultants and franchise brokers can offer valuable insights for mature franchises; however, start-ups and emerging franchisors should initially prioritize organic growth. Focusing on organic growth promotes a deeper understanding of your strengths and challenges, helping you create a stronger foundation for your franchise long-term.

For the first year of your franchising journey, you should prioritize expanding your organic reach and developing relationships with individuals already familiar with your brand. People who understand and appreciate your brand’s value may become your best-fit franchisees.

Organic growth enables new franchisors to pinpoint potential weaknesses within their franchise system and provides time to offer adequate support to early franchisees. This strategy is not only more cost-effective but also more responsible.

Growing too much too quickly often results in overlooking deficiencies that could severely hinder your brand’s success in the future. Slowing down during the initial stages allows you to identify these shortcomings and seek industry assistance to address them. Not only will you save a lot of money initially, but you will also fortify your brand against possible pitfalls, ensuring a more sustainable franchise expansion.

5. Join the Owner’s Advisory Committee

Establishing an owner’s advisory committee or council (OAC) is a common and effective practice within franchising circles. This strategy helps bridge the communication gap between the franchisor’s corporate team and the broader franchise community, creating a more collaborative environment.

Participation in the OAC gives franchisees a platform to express their views and insights. Although these committees are typically advisory, they offer a unique opportunity to shape a budding company’s direction, making your franchise journey more engaging and influential to those in your immediate community.

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6. Don’t Miss Out on Leadership Opportunities

As your journey with the franchisor progresses, numerous leadership opportunities may present themselves to you. These opportunities could range from participating in the Owner’s Advisory Council (OAC) to providing training, mentoring, or even speaking at corporate events and conventions.

Not only can these roles be rewarding, but they may also pave the way for new possibilities and business connections. However, it’s essential to maintain a balanced focus on your franchise operations. As you explore these opportunities, remember to sustain the energy and attention needed for your core business to thrive. After all, a successful franchise lies at the heart of these potential growth avenues.

7. Work With Seasoned Franchise Experts

Partnering with seasoned franchise experts can be a game-changer when expanding your business through franchising. These professionals bring a wealth of knowledge and experience in the franchising industry, ensuring that you are building a robust team of franchisees and keeping your business legally compliant and in line with industry standards.

Experienced franchise experts can help navigate the complex legal terrain of franchising, ensuring you’re well-versed with franchise laws and regulations. They can also help standardize your franchise operations to align with industry best practices. Notably, these experts can provide invaluable guidance in recruiting and training franchisees, helping you create a successful franchise network.

8. Utilize a Growth Mindset

Adopting the right mindset is critical if you want to succeed in the world of franchising. A winning mindset involves more than just being prepared to invest time, resources, and effort into your business. As a franchisor, it’s also essential to assume responsibility for both the triumphs and pitfalls your brand experiences.

Leadership significantly influences the success of a franchise. It’s up to the founding team to understand and adapt to the franchising landscape that sets the winning brands apart. The most successful franchisors are those who aren’t afraid of self-scrutiny that consistently analyze their brands honestly and openly.

Successful franchisors observe their competitors understand their market position and what makes their business model appealing to their customers. Adopting a proactive approach to learning, adaptation, and ongoing assessment can steer a franchisor toward a successful franchising journey.

9. Use Diverse Marketing Channels To Recruit Franchisees

Effective marketing and a robust digital footprint are another key to successful franchising. Building a consistent social media presence, engaging with potential franchisees via email campaigns and branded content, and establishing a well-optimized website to generate leads are vital steps. Additionally, the use of video is highly recommended, given its unique capacity to connect with potential buyers on an emotional level.

Video storytelling can significantly enhance your brand’s appeal by showcasing how your franchise changes or improves lives. Highlighting how your franchise opportunity can resolve potential franchisees’ challenges – such as desires for increased income, more time, or a lasting legacy – can create a compelling narrative. Additionally, the creative process behind these videos often leads to beneficial introspection, encouraging a more profound understanding of your brand’s story and identity.

Emerging franchisors must ensure their digital messaging effectively communicates the advantages of joining their franchise ecosystem.

It should address the primary concerns of prospective franchisees: understanding what the franchise does and whether they can successfully run it. Demonstrating your commitment to supporting them can significantly boost their confidence in joining your brand.

10. Pursue Valuable Partnerships With Franchise Brokers

New franchisors often overlook their relationships with franchise brokers. Neglecting to nurture these relationships can significantly influence future sales as your brand evolves. Navigating the highly competitive franchising landscape is an ongoing battle for attention, meaning it’s crucial to establish an ongoing engagement program that keeps you on the brokers’ radar and continually educates them about your brand’s different facets.

At the minimum, this program should include consistent efforts to connect with brokers over the long term. These efforts can include tailored email campaigns, networking through professional platforms like LinkedIn, or a friendly phone call. Each interaction provides an opportunity to enlighten a broker about your brand, its selling points, operational model, customer base, support team, and many other aspects that they might find valuable.

Don’t underestimate the power of direct communication– sometimes a simple phone call can sometimes make all the difference.

Frequently Asked Questions

What is a franchise?
A franchise is a business model where one party (the franchisor) allows another party (the franchisee) to use its trademark, brand, and business model in return for a fee.

How do I grow my franchise?
Growing a franchise involves effective marketing, identifying unique selling points, maintaining consistency and quality, expanding in strategic locations, and nurturing strong relationships with franchisees and brokers.

How can I ensure consistency and quality across multiple franchise locations?
You can ensure consistency and quality across multiple franchise locations by creating robust and standardized operational procedures, providing comprehensive training, and implementing regular quality checks.

Are there funding options for franchise growth?
Yes, there are various funding options available for franchise growth. One such option is revenue-based financing from firms like Mantis Funding, offering a flexible solution tailored to your business needs.

How can I evaluate potential franchise opportunities for expansion?
Evaluating potential franchise opportunities involves assessing the market demand, financial performance, competitive landscape, and the unique value proposition of the potential location. Regular SWOT analyses can also provide useful insights.


Taking your business to the next level by franchising is a significant step towards growth and expansion. It requires strategic planning, identifying your unique selling proposition, and careful execution to ensure success. It also involves a financial commitment that may seem insurmountable to many prospective franchisors.

However, Mantis Funding’s revenue-based financing options can be the catalyst that propels your business into the franchising arena. Our flexible and tailored funding options can provide the necessary resources, empowering you to seize the opportunities of franchising and take your business to new heights. Contact us today to get started or for more information about how it works.

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About Mantis Funding

Mantis Funding is a business financing solutions firm catering to small and mid-sized business owners in the United States.

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