Franchising vs. Building a Brand: An Introduction

The crossroads you’re at when deciding to go into business for yourself is incredibly exciting. You have carefully assessed the business environment and narrowed down your next career step: either build your own brand or buy into a franchise. Before deciding to invest your money and your life into one or the other, let us set the stage for what both choices entail.

Defining Brand and Franchising

A brand is the known identity of a company in terms of products and services they offer, including the essence of what a company stands for in terms of service and other intangible consumer concerns. Franchising is a long-term corporate agreement between two entities where a franchise provides licensed privilege to a business owner to do business. Keep in mind that almost every franchise is an established brand, but not all brands choose to franchise.

Brand Strength

Having a successful, highly visible brand provides a level of recognition and emotional investment with customers that marketing can’t purchase. Building a powerful brand doesn’t happen over night, it’s time-tested with the company providing a quality product or service with a high level of customer satisfaction. Brands provide their company with strong competitive advantages in their field or market.

Brands that Look to Franchise

Franchises can be brands that are successful, long-standing, or both. Choosing to franchise an established brand has proven to be a successful business model that accounts for nearly 11 percent of all businesses in America. Deciding to franchise takes financial stress away from your brand’s business model, spreading risk between you and the franchisees. When you choose to grow your brand into a franchise you receive greater market penetration by becoming a presence in areas you weren’t before.

Not All Brands Aspire to Franchise

Successful brands don’t necessarily opt to franchise. One of the many reasons for choosing to refrain from franchising is market saturation. Exclusivity may impact your brand’s ability to duplicate successful business in new markets. Another reason is sector sustainability: is your industry capable of sustaining franchises? In various commodities, like electricity, there is little to no room for market infiltration with price driving consumers above all else.

Staying a Brand and Not Franchising

Transitioning your brand to a franchise requires a lot of work you may not have the resources for. The government requires plenty of legal documentation, non-disclosure agreements, and other filings that will have you seeking a lawyer’s assistance. You must remember that your franchisees are customers as well as business investors. You have to supply them with a high level of service. You’re not only responsible for the marketing and maintenance of your brand in its current state; you will be expected to grow those things moving forward.

To Continue With a Brand or to Franchise

Choosing to continue with your brand independently or deciding to grow with franchising, remember both carry pros and cons. When faced with this opportunity, businesses must review what their mission statement is and how a decision to franchise would impact the company in the long term. Regardless of the outcome, it’s a great position for any business to be in when considering growth through franchising.

Give us a call with any questions about how you can be your own boss in the medical billing industry today!

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