Having trouble getting some simple, unbiased information about franchising?
When you begin seriously thinking about franchising, you'll need the answers to all your questions. And you'll need those answers to be honest or you may embark on a very expensive misadventure. Below are some of the questions that I am most frequently asked.
I have been helping people assess their chances of success in franchising for many years. Some companies should not franchise, and others may find that alternative business formats, such as business opportunities or dealerships, may be easier and more lucrative.
I limit the number of franchises that I develop each year, so I work only with the businesses that I strongly feel will succeed. If you want a comprehensive analysis on your chances for success as a franchisor plus a To-Do List for your business growth, my two-day feasibility study will give you the answers you need. My fee for the feasibility analysis is $1800.
Frequently asked questions about franchising
How long will it take to franchise my business?It usually takes a minimum of three to six months, depending upon your readiness. Do you have your systems written down in manual form? Do you have quality advertising already prepared?
Franchisees expect to be given complete instructions on how to operate the business. Organizing and documenting your procedures plus setting up strong branding and marketing programs for your company often takes the most time when getting ready to franchise.
Do I have to sign a big expensive contract that I can't get out of if I change my mind?Absolutely not! I offer all my services on an "a la carte" menu so that you only need to pay for the services that you need.
Starting with a two-day feasibility study, we'll decide whether your business has the basics it needs for success.
If you decide to take the next step, I'll write a complete strategic plan for you with all the processes and activities outlined, along with financial projections.
And if all that looks great to you, I'll develop the documents you'll need to get ready for franchising by writing your manuals, instructions to your attorney on the legal paperwork, and overseeing your franchise sales and marketing program.
How much will all this cost?Anywhere from $1500 to $35,000, depending upon your needs and whether you have an in-house staff that I can guide to help with the work, or whether you wish for me to complete all phases of development for you.
I recommend that you have a minimum of $75,000 available to spend on franchising before you start into the actual development phase.
What if I just need to get some answers and find out how to get ready?I will be happy to talk to you by phone. Beyond that, if you would like for me to come to your business, answer all your questions, assess your chances of success as a franchise, and show you how to get ready to franchise, I charge $1800 plus travel expenses. In return, you will have a written analysis and a To-Do list for your future growth.
We will discuss the various choices of business formats and determine if franchising is the best for you, then I'll list all the activities that you can accomplish yourself to keep your costs down.
It'll be an exciting and fast-paced visit as we go through a packed agenda. Your business will benefit from my experience in operations and management even if you decide not to franchise!
What if I don't have my systems written down?That's what I do! We'll talk over every nuance of your business and make decisions about how you want franchisees to behave. Then I'll write a set of manuals for you: Pre-Opening, Operations, and Human Resources, Sales and Marketing. I write the manuals so that they can become your training textbooks, too.
What kind of legal requirements are there?The Federal Trade Commission has established official guidelines for your disclosure documents. You're required to have a Federal Disclosure Document (FDD) and Franchise Agreement that conform to these guidelines. Some states also have slightly different requirements and require registration in those states before you are allowed to sell franchises. Operations Manuals are also necessary.
I will determine the basic systems and numbers for the FDD and work with your attorney to produce legal documents that fit your specific systems. This step comes after the strategic planning stage.
How much money can I charge for my franchise?This is one of the important decisions we make after I have prepared your financial projections. On the average, initial franchise fees are between $20,000 and $30,000.
You will also charge some sort of ongoing monthly fee or royalty, and this, too, is determined by the profitability of the business. In most cases, 5 to 8 % of gross sales is an acceptable range.
What should I do first?Before you make any big decisions, you need to know if this is the right route for you to take. I recommend the "toe in the water" phase first! Test the water by getting a true opinion from an expert on what your chances for long-term success will be. Please call or contact me me to discuss your chances for this exciting method of growth!
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