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Key Takeaways With franchising, a lot of the money you make doesn’t come from the success of your product. It comes from selling territory and the fees you charge your franchisees, which can lead to complacency.
Franchising is ideal for fast food chains but can create challenges in industries where operators have more complex responsibilities.
With a dealership model, the money you make comes directly from the success of your dealers. This creates motivation to empower dealers with support and training.
It’s good for your dealers because they get to build a brand in their local market. Customers also benefit because they can trust that the service they receive is backed by a company with skin in the game
Congratulations, founder. You’ve just successfully achieved product-market fit, and things are going well for the business you started. Now it’s time to expand. How are you going to do it?
Opening new locations is often beyond startups because it requires resources that might not be available. Franchising often seems like an easier way to scale. But while franchising can help you grow a burger chain, it’s not always appropriate for other types of businesses.
That’s why I chose a different model for Roof Maxx, the company I started with my brother Todd to bring cost-effective roof restoration to North American homes and businesses. Below, I explain why creating a dealership network across North America allowed us to grow without taking on more risk than we could handle, and why it also let us sidestep the problems that come with franchising. Read on and learn what to consider when making this decision for yourself.
Related: 3 Reasons Why You Shouldn’t Start a Franchise
Why franchising might not be right for your industry — unless you work in fast food
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