Capital is always scarce in growing a business. In franchising the capital needed to expand the business is provided by the Franchisee. It is the classic case of using OPM, or other peoples' money.
You can search for business interested in franchise by registering./logging on as an investor and searching for franchise opportunities.
Trained, motivated management is part and parcel of franchising. It is difficult to find and keep good experienced managers, who are so necessary to grow a business. Franchise units tend to be better run, therefore more efficient and profitable than company owned units, for the simple reason that the Franchisee's capital is at risk and they tend to be very motivated.
Because there are few impediments to growth through franchising, it offers the opportunity to have 1000's of units through out the world, and no other business expansion model can offer that.
The large number of units allowed by franchising enables the company to buy for the entire system and at great savings to the individual franchisees. This greatly enhances profit margins and gives the franchisees a very strong advantage over all competitors. Because successful franchises tend to grow rapidly, they tend to locate many units in a given market and essentially squeeze out the competition. A franchise can do extensive advertising in a given market because the costs are spread among many units.
This combination of having many high profile locations with large advertising budgets is a competitive advantage that can't be overcome.
Most franchisers require that the franchisees pay an ad royalty to the company. These monies are pooled to make top quality advertising materials for the franchisees. Again it's the advantage of spreading cost over a large number of franchisees, so that everyone benefits.
Franchises make money in a number of ways such as the following: