Sylvan Franchise Blog

The Two Reasons Why Brands Don't Franchise

Posted by Laura Dunn on Feb 2, 2017

Franchising is a popular business model that allows chains to open more locations at speed and with fewer cost implications. Many of our well-known companies including McDonalds, Dunkin Donuts and Burger King operate on the franchise model, ensuring rapid expansion and market domination across both the US and the globe.

Franchising offers franchisees the opportunity to independently build, open and run business locations with support from an established brand and direct access to a share of profits.

Despite the success of a franchise model, some companies and stores do not opt for franchising as a way to expand their brand.

 

What are the two reasons why brands do not franchise?

 

Culture: key to the success of every company, culture is a reason why some brands do not look to franchise. One of the most common companies not to franchise is Starbucks. The brand actively markets itself on this, citing the vision and value system of its company as well as its passion for products through extensive barista training. They do however accept licensed partners in a way to expand their reach but retain control of their image.

 

Control: companies want to keep control of their products, service and maintain their brand image. Giving away control to other individuals can lead to a watering down of these three components, and increases the chance of risk and reputational damage. Keeping control is a major factor in a company’s decision to franchise, and staying in charge ensures that a brand can directly manage its business operations and expansion strategy.

 

Overall, the franchise model is a success, and particularly in the world of education. Sylvan Learning focuses on an inclusive culture and supports its franchisors through a range of programmes. For further information on operating a Sylvan Learning franchise visit http://www.sylvanlearning.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Topics: Entrepreneur Insight