When franchises and family businesses are mentioned together, what comes into the mind of the listener is that the family owns the franchise. Several families own businesses that leverage existing brands through the medium of franchising. Some of the biggest restaurant franchises are owned by families. Most are husband-wife owned. Each of them holding a position; the manager while the other one as a co-owner/assistant. Others are father-son owned and the combination is endless.
Franchising is one of the most popular ways of getting into business because the franchisee or franchise owner has an easy access to an already established brand with proven business systems that are supported by existing companies that have been successful in at least a specific location or franchisor. So, it’s not surprising why many families are starting franchising businesses. The term franchising technically means a license or agreement between parties (basically two) giving a group or person (usually the franchisee) a right to market the products or services by way of a trade name or trademark of another (franchisor).
Franchising is a little bit more prevalent than you may think. Most industries nowadays use franchises as a means of distributing their products or services. Again, you should not be surprised to hear 70% of these are owned by families. Families own franchises as well .Most of them have shifted to franchising in a bid to grow their product’s brands without the need to raise significant capital for purposes of expansion.
Because franchising models allow growth of family businesses using other people’s resources it can be very lucrative. In addition to payment of upfront fees for development of the franchises, the franchises pay an ongoing percentage of total revenue to franchisors typically in the range of 4-6 percent. But going into franchising requires good investments in terms of resources and risks are also not ruled out. So, before franchising you will need to do proper and careful planning for your future venture.
One of the biggest family owned franchises is Big Boys restaurants, a well known family business franchise. It roots from Samuel Frisch’s Café that was started back in 1905.He later passed this franchise over to his three of nine of his children in 1923.today, it’s grown and the franchise business is not what it was several years back.
Families have become successful from this franchising model, for both franchisees and franchisors. However those families that are intending to use the franchising model in a bid to grow their business must understand that investment is a key for success. In spite of the royalties required and regular fees, you may lack the capital to get you going or even a team to oversee the franchise quality. These are two very critical factors for franchising. If you don’t have enough resources for the above stated factors then consider starting a restaurant venture business.
Apart from building a franchising model with a win-win situation for both parties, you also need to offer great services as a business. This includes purchasing, employee training development of technology among others. Also, make sure you have great recruiting team to help you hire the right people to work with you. Whichever way you may choose to follow, make sure you adhere to the industry’s own rules and regulations so that you are on the safe side.