Brothers Dan and Don started a dumpster rental business that has proven to be successful. Now they are pondering the idea of expanding the business to include more business owners to increase their profits. What option might they consider? (1 point) Responses Hire managers to run operations Hire managers to run operations Trademark the business Trademark the business Establish franchises Establish franchises Rent the dumpsters to landlords
Establish franchises
The option that Dan and Don might consider to expand their dumpster rental business and increase their profits is to establish franchises.
To help Dan and Don expand their dumpster rental business to increase their profits, one option they might consider is establishing franchises. Establishing franchises allows them to replicate their business model by granting individuals the right to operate under their brand name and proven system in exchange for a fee or royalty.
Here's how they could go about exploring this option:
1. Research and Planning: They need to conduct market research to identify potential locations where franchises can be established. This would involve analyzing the demand for dumpster rental services and competition in different areas.
2. Develop Franchise System: Dan and Don need to create a comprehensive franchise system that includes detailed operations manuals, training programs, marketing strategies, and ongoing support to ensure consistency across all franchise locations.
3. Legal Assistance: It is essential to seek legal advice and hire a franchise attorney to help them navigate the legal requirements involved in setting up a franchise system. This includes preparing franchise disclosure documents, ensuring compliance with franchise laws, and drafting franchise agreements.
4. Franchise Recruitment: They should develop a marketing strategy to attract potential franchisees. This can include advertising through industry-specific channels, attending trade shows, networking with business organizations, and establishing an online presence.
5. Franchisee Training and Support: Once they have identified potential franchisees, Dan and Don should provide them with comprehensive training that covers all aspects of running the business. Ongoing support should also be provided to ensure the success of the franchisees.
6. Franchise Fee and Royalty Structure: They need to determine the franchise fee and royalty structure. The franchise fee is the upfront payment made by franchisees, while the royalty is a percentage of their ongoing revenues paid to Dan and Don. These amounts should be carefully calculated to ensure they are fair and profitable for both parties.
7. Documentation and Compliance: Finally, they should establish a system to ensure compliance with brand standards, quality control, and ongoing monitoring of franchisees to safeguard the reputation and consistency of the business.
Expanding through franchises can be an effective way for Dan and Don to grow their business while allowing others to share in their success.