Handling Explosive Growth

Guest post by: John Power
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Franchising as an Alternative to an IPO? - By John Power

Most franchisors would like to have to deal with the problem of explosive growth, i.e. selling hundreds of franchises in the first few years, but this can be a problem.

If the franchise system grows so rapidly that methods, procedures and support cannot keep up, a franchisor can end up with franchisees that are unsuccessful, and very unhappy.

There have been franchise chains that grew so quickly that the franchisor was unable to provide the support needed by new franchisees, including approving locations. You may have read of some of these chains in the business media. Some such franchisors reached a position where they had sold hundreds, or even thousands, of franchises, that were not yet open.

It may seem that they should have been able to keep up with the growth. However, as sales increase, so does overhead, and if a franchisor is not careful, it is possible to reach a point where the franchise fees have gone into overhead, and taken out as profits, leaving insufficient funding to support new franchisees before and after opening.

So, what is a manageable growth curve? Many successful franchisors sell about 5-10 franchises in the first year, and then build their system from that point. We believe it is important to develop a base of successful franchisees, and have the systems in place to support them, before “exploding” the franchise system by adding hundreds of new franchisees each year.

More information can be found at: www.biltmorefranchise.com

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Franchising as an Alternative to an IPO? - By John Power

About the Author: John Power

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John Power, founder of AdvantaFran Franchise Consulting, has extensive experience in franchise development and sales. He has been in and around franchising for over twenty years.

In 2005 Mr. Power began working as a franchise development consultant, and developed his own botique franchise development firm. He has worked full-time in the franchise industry since that time.

He has developed a franchise consulting company with experience in all areas of franchising, from legal document preparation to marketing, sales and support, and has brought over 30 concepts to market in the past 7 years.

Mr. Power also offers "shared sales management" services, which allows new and emerging franchisors to benefit from his sales and marketing skills and experience, without having to pay for a full time sales manager. Also skilled in developing "Streams of Positive Content," he will help you increase your sales success by creating a large amount of positive information on the internet about your franchise offering.

Mr. Power is a successful instructor and teacher of the franchising industry and franchising principles, and presents training sessions for both new franchise brokers and employees of franchise companies.

You may contact Mr. Power at www.advantafran.com

Click here to visit John's website.

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Handling Explosive Growth

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