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What’s a Conversion Franchising?

Conversion franchising transforms established and personally owned businesses into partners of a standardized network. Profitability and scalability can be increased because these members have customers, a physical location and ample business experience. One of the positives of this business model is that the franchisee does not start from the bottom. But rather has an already established business in the field of franchise.

How Conversion Franchising Helps Struggling Businesses?

Conversion franchising allows the alteration of a trade name and operating system to that of a franchise. Everything needs to be in compliance and accepted for the franchise relationship to work. The business can literally hit the ground running because it is:

  • already in existence
  • making sales and
  • getting a steady stream of customers.

A Disadvantage

A disadvantage of this type of franchise system is that most operators are set in their ways and find it hard to adapt. There are cases where it has been difficult to get a conversion franchisee to buy into a franchise system. They simply cannot comprehend why they are paying for a business that they own, when it should be the other way around.


However, there are advantages abound. A good reason to consider this is because of the competitiveness of the franchise industry. Needless to say, to remain in the thick of the action, one needs to think out of the box. Conversion franchising adds a different dimension to the franchise business. Franchise companies can continue to build their brands by being adaptable, not too rigid and attracting more people.

There are two basic ways to execute conversion franchising. The first way is to present a franchising brand to an established business owner in the same market or industry. The other way is to tender a franchising brand to an autonomous business owner who wants to branch out because of financial challenges and the recessive economic trend.

Many business owners are privy to diversification because their incomes have hit the rocks. They have gone down from doing a few million dollars a year to a few hundred thousand dollars. They want to keep their staff, provide for their families and halt their businesses from going under. This is what makes conversion franchising an interesting prospecting for them. It is a life-saver.


On the other hand, offering franchises to self-reliant business owners in the same industry is a prospect worth considering. Their businesses have suffered a lull because of the economy and they lack the skills or system to adapt or get back on their feet. They have no idea of how to recover in an economy that is on the wane. They need help with marketing systems and require online aggression and activity on social media to attract new business, amongst other things.

About The Author

Alam Qureshi is a Certified Business Intermediary (CBI), Certified M&A Professional and Broker of Record at ProClient Brokers Inc., Brokerage. He helps franchisors in expansion of their brands and assist franchise buyers find right franchise in their situation. Call us 416 364 5550 or CONTACT US to get in touch.

Date modified: 11-07-2019

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