So when you look at franchising it, of course, is an ideal leverage model.
I remember explaining to my son once, when I told him that we sold another franchise, he was trying to understand how this works. So where did you buy the franchise from? How does that work? And so I sort of explained to him that what franchising is – it’s where you’ve created a business model, and then you’re able to duplicate that again, and again, and again. In essence, pre-sale, future revenues in specific locations and zones.
And that’s an ideal leverage model.
So one of the distinct advantages of franchising is being able to take a successful business model, one that works and is able to deliver great value to clients. Great Service has a structured business behind it, and then scales it effectively through the franchise framework.
The way that it works through leverage is the ability to duplicate the core functions in your business, put it within a framework, which includes a training framework, operational framework and platform that then enable hundreds or thousands of business owners to duplicate in essence, the business that you’ve created. And that is highly leveraged.
So for example, if you have five or six staff at the moment and the revenue you’re generating is 1 million dollars per year, unless you’re bringing on additional staff it is very difficult to scale this without putting in more working capital. The beauty of the franchising framework, if built correctly, and using the correct principles, is that you can then scale effectively whilst at the same time enable franchisees to build a proven successful business, thereby reducing their risk in business, so you can effectively spread and leverage your business significantly in diverse geographic locations.
So franchising is by definition, and as a, as a core principle, a leverage model.