The Benefits and Risks of Franchising Your Business

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Imagine that you own a uniquely appealing local food service concept that routinely has lines out the door. The first unit was so successful that you opened a second across town, which is doing equally well.

The question then becomes, how can that concept further grow? Do you take all the risk — max out credit cards and/or knock on bankers’ doors in an attempt to raise capital for expansion? Do you take on partners and dilute ownership stake and decision-making power? Or do you investigate franchising?

If your business has strong unit economics and a system that’s easily duplicated (but not

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