Five Reasons Why a Franchisor Should Have a Company Owned Location

22 Jul Five Reasons Why a Franchisor Should Have a Company Owned Location

In our Franchise Grade statistic of the week we report that 36% of franchisors disclose that they have no corporate locations. Although many franchisors can debate the advantages and disadvantages of company-owned locations, I take the position that having a minimum of one corporate location makes sense. Here are five reasons why:

1. A company location can be used to test new products and services, technological innovations, new operational practices and advertising and pricing programs. In the restaurant sector new recipes and menu items can be tested and configured before further testing at franchisee locations.
2. Used as a location for new franchisee training.
3. To analyze and measure financial performance and staffing configurations.
4. To enhance the training of new franchisor staff. When used to train franchisor personnel, ranging from field staff to headquarters employees, can provide employees real world experience.
5. A well managed and profitable corporate location can add income to the franchisor and if appropriate can always be franchised. Some large franchisors have recently sold a number of corporate locations as franchises in order to add income to the bottom line.

Having a corporate location can bring a number of advantages to a franchise company. Larger franchisors may find it appropriate to operate several corporate locations.