Franchise Fees Produce Income, but be Careful

Guest post by: John Power
Become an Author

Free PDF Download
Franchising as an Alternative to an IPO? - By John Power

Be Careful How You Take Franchise Fees!

Sounds like a problem you would like to have, right? Too many people trying to give you money.

Well, in franchising, it is important to be careful who you take franchise fees from. Each time someone pays you a fee, you enter into a long-term relationship in which you need to do your best to help them be successful.

Here are some questions to ask yourself before you receive a franchise fee: What is the source of their funds? Who will actually own the franchise? Can I picture myself doing business with this person for a long time? Do I like them? Is this person like others in my system who are successful? Is this person generally positive, or negative, about life? What are their true chances of success? Are they realistic about what the program can do for them?

Sometimes it is difficult not to take every fee opportunity, but if you are somewhat selective about who you accept into your franchise system you are likely to have a higher percentage of franchisees who are successful.

In fact, if you don't turn people down, who are ready to give you the franchise fee, you are probably accepting franchisees that may not be a good fit for your franchise organization.

Before taking that fee think about your obligations and the long-term relationship that you are about to experience.

But, take those initial fees, from the right candidates!

What is the purpose of the initial franchise fee, and how is the money allocated?

The initial franchise fee compensates the franchisor for the knowledge, experience, support, and brand that are provided to the franchisee. We ask clients, "If someone were to start a business like yours, how much time and money would it take for them to learn what you know?" Most roll their eyes at the thought! Franchisees are willing to pay something less than this amount for a "jump start" along with ongoing assistance.

The initial franchise fee reimburses you for the cost of developing your franchise program, pays for the cost of making the sale (advertising and commissions), reimburses you for training and start-up support, and includes some profit as well. Helping you determine the amount of your franchise fee is part of our Strategic Planning service, and we will be happy to provide franchise fee research.

More information can be found at: www.biltmorefranchise.com

How to Compare One Coffee Franchise to Others

Franchises Versus Licensed Business Opportunities

FAQs about Franchises

Franchise Contracts - Getting Sick would really Suck

"Untouchables" and "Discussables"

How Much Do Franchises Cost?

Funding the franchise business - franchisee

10 Things You Should Know About Franchising

Financial Analysis for Evaluating a Franchise opportunity

Passive Income in a Franchise

Question Your Franchise Decision Making

How to Evaluate a Start-Up Franchise Company.

Franchising with all its Success

Low Cost Franchises Offer Way to Own Your Own Business

How to Buy a Business Opportunity

10 Tips for Selecting the Best Franchise

10 things to discover before buying your franchise

Top Reasons To Buy a Master Franchise

The Truth About Franchise Royalty Fees

The Cost of a Franchise Offering

Home > Franchises > John Power > Franchise Fees Produce Income but be Careful > Google +

Free PDF Download
Franchising as an Alternative to an IPO? - By John Power

About the Author: John Power

RSS for John's articles - Visit John's website

John Power, founder of AdvantaFran Franchise Consulting, has extensive experience in franchise development and sales. He has been in and around franchising for over twenty years.

In 2005 Mr. Power began working as a franchise development consultant, and developed his own botique franchise development firm. He has worked full-time in the franchise industry since that time.

He has developed a franchise consulting company with experience in all areas of franchising, from legal document preparation to marketing, sales and support, and has brought over 30 concepts to market in the past 7 years.

Mr. Power also offers "shared sales management" services, which allows new and emerging franchisors to benefit from his sales and marketing skills and experience, without having to pay for a full time sales manager. Also skilled in developing "Streams of Positive Content," he will help you increase your sales success by creating a large amount of positive information on the internet about your franchise offering.

Mr. Power is a successful instructor and teacher of the franchising industry and franchising principles, and presents training sessions for both new franchise brokers and employees of franchise companies.

You may contact Mr. Power at www.advantafran.com

Click here to visit John's website.

More from John Power
Franchising is a DesignBuild Program
Is Franchising Scary
Franchise Your Business
Good Employees for your Franchise Company
Franchisors Need Four Cs When Working with Brokers

Share this article. Fund someone's dream.

Share this post and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Featured

Expert

Dr Don Yates Sr PhD
@drdony
Visit website

Franchise Fees Produce Income, but be Careful

Related Articles

Related Forum Posts

Share this article. Fund someone's dream.


Name:
Email: