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Franchising/Franchise vs. Corporate


Could you please offer some input on the advantages and disadvantages of keeping a business corporate, franchising it, or mixing the two?  This is a niche-demographic fitness business that could thrive in various markets.

Thank you!

iFranchise Group
iFranchise Group  
Dear Mike:

You are certainly on target by giving careful thought to the advantages or disadvantages of franchising vs. retaining corporate control over your locations.

When it comes to business expansion a barrier to growth for many companies is available capital. One of the advantages of franchising is an ability to expand more rapidly without infusion of your own capital. In addition to money, opening a second or third business - especially in a location-based business such as yours - takes considerable human capital (i.e. finding a site, negotiating a lease, overseeing equipment installation, and the like). And while a franchisor will likely advise on these matters, the franchisee will handle the majority of the details.  Another advantage to franchising is that you would not be required to secure management in other locales - a difficult task for many businesses especially those in the fitness industry. Your franchisee/owner is motivated by their own capital investment and desire to succeed to manage the business themselves or secure the best local talent.

And while I wouldn't phrase it in terms of a "disadvantage" to franchising, not every company or its management is ready to franchise. Your business must have enough "sizzle" to be credible in the eyes of prospective franchisees. You need to be able to clone your business - is it teachable and are the systems in place so that it can be duplicated? Also, does the business provide enough of a return on investment to be advantageous to you and the franchisee?

Your question also asks about "mixing the two" - company-owned and corporate. I couldn't give a recommended corporate-to-franchise ratio without knowing more detail about your company, its financials, your people, the competitive landscape and other factors. However, it can be said generally that maintaining and even adding corporate locations concurrent with developing franchises is a sound strategy. Continuing to develop corporate locations can help increase the credibility of your offering in the eyes of current and prospective franchisees, can serve as training locations for franchisees, and can increase your company's own overall profitability.

Please visit our website at to request more educational materials or to speak with one of our consultants. You can also email me directly at

Thanks for your question Mike and good luck.



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Mark Siebert


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I have worked with hundreds of franchisors, from start-up operations to corporate giants. A franchise consultant since 1985, I founded the iFranchise Group in 1999 as an organization dedicated to developing long-term relationships with successful franchisor clientele. I am considered an expert in evaluating companies for franchisability and structuring franchise programs. I have personally assisted over 30 Fortune 1000 companies and over 200 start-up franchisors. I am frequently called upon as an expert witness in franchise-related cases, and am widely quoted in the business press. I am a regular columnist for Franchise Times and

International Franchise Association; Canadian Franchise Association

Franchise Times (monthly column) (monthly column)

Northern Illinois University

Awards and Honors
Franchise Times 20 to Watch (2002) International Franchise Association Member Recruitment Award (multiple years) AAFD Supporting Member of the Year; Top Quality Franchising Chairman's Award

Past/Present Clients
Massage Envy; GarageTek; i9 Sports; Milio's Sandwiches; Andy's Frozen Custard; EVOS; Capriotti's Sandwich Shop; Perkins; Ace Hardware Japan; Praxair; Auntie Anne's

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