Big Chains Usually Don’t Franchise
Summary
- Many successful chains choose to corporately own all their locations because their brand is strong and profitable on its own.
- Corporately owning locations eliminates the need to franchise, which can be more lucrative if the business hasn't optimized its per location performance.
- Franchising is often a strategy for businesses that haven't fully maximized their original location's potential revenue.
- Some companies start with around 100 corporately owned stores before considering franchising, using it as a tool to boost brand awareness rather than as the primary business model.
Video
How To Take Action
I would suggest first focusing on strengthening your brand and making sure your business is very profitable. This means looking closely at your current location or business model and figuring out ways to make more money from each part. That might mean improving the quality of what you sell, getting better at sharing your brand's story, or making sure customers have an excellent experience every time.
Here's an action plan:
- Look at your products or services and see if they are the best they can be. Are customers happy? If not, figure out how to make them better without spending a lot of money.
- Make sure you're telling everyone how great your brand is. You can use social media or tell stories to people in your community. This is a good way to get noticed without spending much.
- See if your business runs smoothly. Is there anything you can do faster or better? Sometimes making small changes can make a big difference.
- Check your money. Are there any ways you can cut costs without hurting your business? Maybe you can find cheaper supplies or cut down on waste.
After you've done these things, and if your business is doing really well, you can think about opening more locations yourself. This way, you keep all the profits and control over your brand.
Only think about franchising if you want to spread your brand faster after you've already opened enough of your own stores. But remember, this should not be the main way to make money—it’s more for getting your name out there.
Quotes by Leila Hormozi
"They corporately own everything why because they make so much money and they have such a great brand why would you want to let people franchise it"
– Leila Hormozi
"The only reason that a lot of people franchise because they make more money franchising than they do on their original business"
– Leila Hormozi
"They never took the time to really optimize the per location metrics"
– Leila Hormozi
"They go corporate and they might do like a 100 locations corporate"
– Leila Hormozi
"Then they might franchise later just to get more brand awareness"
– Leila Hormozi
Full Transcript
some of the biggest chains that make the most money they do one of two things one is that they corporately own everything why because they make so much money and they have such a great brand why would you want to let people franchise it the only reason that a lot of people franchise because they make more money franchising than they do on their original business because they never took the time to really optimize the per location metrics now the second thing people do is that they go corporate and they might do like a 100 locations corporate and then they might franchise later just to get more brand awareness
