The benefits of franchising are its low priced capital yet at the same time earns sizeable income or profit. This is the reason why most restaurants love franchising. Although a franchise opportunity is a good business, some franchisors still think they need to operate on other locations to keep their credibility and earn more franchisees. Other continues to buy franchise and operate in different areas to check out new concepts that may or may not work for them.
Despite the number of units a franchisor own, the big question still remains and that is how much is the percentage profit of the company ownership? Some restaurant executives claimed that you’ll only know the amount once you know it. Confusing right? A conference in Four Seasons Las Vegas was held, “Franchise Finance & Growth” where most of the panel present in the conference were restaurant executives and they indeed claimed that the percentage is not done in magic. This was in fact said by Jim Greco who was the previous owner of Sbarro and Bruegger’s.
Most successful franchisors have long been unloading in different locations such as the famous Applebee’s or the Burger King. On the other hand, there are some franchisors who still believed to buy franchise based on percentage. According to the chief executive officer of Wingstop which is based on Texas, the practice of holding on to an owned franchise is not really needed. Charlie Morrison thinks that franchisors need to explore other places to check and better understand variables of other market consumers and its locations.
Lastly, Jim Greco provided a thought to ponder to those who want to buy franchise. He said never to combine a company to a franchise. By combining these two entities may result in chaos or conflicts. According to Greco, creating multiple franchises gives you an idea of the variable from one store to another. Franchise opportunity is everywhere but it must be understood properly to run it smoothly. Having multiple franchises is good and you’ll just know what ratio is enough once you’re starting to profit enough. After which, grabbing a franchise opportunity will then be considered as worth it.