FRANCHISING IS AN EXCELLENT EXPANSION METHOD
Franchising offers a number of significant benefits and solutions in terms of expansion capital, local unit management and time to market.
1. Expansion Capital - Franchisees furnish most of the capital required for the franchisor's expansion - equity, business loans - for the development of real estate, leasehold improvements, FF & E (furniture, fixtures & equipment), inventory, pre-opening and ongoing working capital.
2. Local Unit Management - Franchising provides the franchisor with the motivated and effective local management needed to ensure a professionally operated business. Unlike a typical employed manager, the franchisee makes a financial and personal investment in the business and therefore, remains highly motivated.
3. Time to Market - Because franchisee's provide the expansion capital and local management, the franchisor can expand at a faster rate than if the franchisor was required to raise the needed expansion capital, recruit and train local management and build the "company operations" infrastructure that would be needed to expand outside the franchisor's current local marketing/trade area.
Franchising can be Very Profitable - According to the International Franchise Association, the average new franchisor sells 6-8 franchises in their first 12 months and 15-20 thereafter. With franchise fees averaging $20,000 - $30,000, that's a potential income of $120,000 to $150,000 in franchise fee income in your first 12 months. In addition, franchisees are generally required to pay you - the franchisor - an ongoing monthly royalty of 5-8% (national averages) of their gross sales. Using a basis of $500,000 first year gross sales per franchise location as an average, your annual royalty income will exceed $200,000 from these initial franchisees. You may also receive income (10-20% mark-up) from any proprietary products that are unique to your business and only available from you. Also, most franchisors require their franchisees to spend a minimum of 3% of gross sales for local advertising of their business - (which promotes your trade name at the same time) and the franchisee contributes 1% of their gross sales to the franchisor to cover the cost of producing professional advertising materials and programs.
FranchiseConsulting.Net specializes in assisting companies develop a successful (and highly profitable)franchise program.
"THE CRITERIA TO DETERMINE YOUR "FRANCHISEABILITY"
- A good track record of profitability.
- A unique or unusual concept.
- Broad geographic appeal.
- Relatively easy to operate.
- Relatively inexpensive to operate.
- Easily duplicated.
With over 30 years experience - domestic and international - and over 400 franchises sold worldwide, and author of "Franchise Sales & Marketing Strategies" - I can generally have your company ready to begin franchising within 45-60 days (non-registration states).
1. Development of Franchise Disclosure Document (FDD), Franchise Agreement, Required Exhibits.
2. Development of Operating Manuals - Operations, Marketing, Site Selection
3. Consultation on Layout & Design of Franchise Website
4. New Franchisor Training - utilizing my book "Franchise Sales and Marketing Strategies"
5. Will consider handling your initial franchise sales.
Chuck Woolweaver, President
"Franchise Your Business"
561-749-0767 - Office
561-703-8549 - Cell