Uncovering Various Franchising Alternatives

One way of growing a brand name or a company’s products or services is to expand via franchising. While this is an excellent way to see some tremendous growth, the key to this process is not just following the letter of the law, but more importantly, it is about making sure that franchising is the right move. If it is, then so be it, but if it isn’t, for whatever reason, you might want to look into certain franchising alternatives. What is commonly understood is that while franchising is a good and proven way to grow, there are some other ways to go about it.

The first thing you will want to understand about franchising alternatives is to first understand what the textbook definition of a franchise is. How it is typically defined is in three steps, the use of a common trademark, the availability of training or support and the collecting of fees over a designated period of time. The reason why knowing this is so important is because the low cost franchising alternatives will tend to only vary slightly from what a standard franchising agreement would be.

One way would be to simply not collect fees until the initial 6 month period is over. You could do everything else like a franchise would, but without the collection of fees, this would constitute a “no fees” agreement and technically not a franchise.

However, you need to be very careful, while this can work, if the non franchisee buys anything from you and your company that could be viewed by some state laws as collecting fees. This sort of violation could end up costing you big.


Another option is by using a trademark license. This happens all the time with sports stars. They can lend their name to a car dealership, a clothing line or something else. However, you have to understand that unless you have a marketable name; it is extremely difficult to grow your business in this manner.  Of course there is always company owned growth as well. While not as cheap as franchising it is one of the Franchising Alternatives.

One of the biggest disadvantages of franchising is that when you have other people representing your products or services, and if something goes bad, it reflects poorly on your brand. Even with many of these Franchising Alternatives, that problem will still exist. That is why so many companies find it more agreeable to go with company owned growth instead.

Christopher Benoit



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August 2011
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