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Franchise costs

Franchise costs

There are a number of different costs to pay when setting up and running a franchise, so it is important to ensure all of them are examined when choosing a franchiser.

Some fees may be low but there could be others that franchisees do not know about or the extent of them before entering into an agreement. It is crucial that they discuss these with the prospective franchiser.

A deposit is usually needed to research the territory and to help find a suitable property and in most cases, if a franchise agreement is signed, the deposit will be part of the initial fee and if one cannot be worked out or a property cannot be found in time it will be returned.

If franchisees immediately benefit from the deposit money, such as getting a specific territory reserved for them, it can be partially or non-refundable.

Therefore, they need written confirmation from the franchiser which clearly sets out the terms of the deposit including the time limits for the new franchise to be ready to open.

Franchisees will need to pay an up-front fee once a franchise agreement has been made so that the franchiser can provide specialist and regular equipment, its recruitment system and a training programme.

They must also be realistic and be able to meet this cost, but the good news for people determined to enter this industry is that initial fees for franchises are extremely varied to cater for all types of entrepreneurs.

They can be as low as under £10,000 and as high as millions of pounds with major franchise organisations.

As each franchise outlet is an independent business, franchisees need to choose a business structure. It could be a limited company, partnership or sole trader and these involve different costs.

Once the franchise is up and running, it will pay the franchiser a royalty, a percentage of sales or a fixed amount, with the amount determined by the level of contribution to the business by the franchiser. This system also mainly applies to advertising fees.

In some cases, franchisees will need to purchase stock from the franchiser and so it is important to check what prices it charges.

In addition, they must ask when they need to pay a renewal fee to obtain an extended contract term and if there could be special fee charges for services like training in the use of new software.

If franchisees are able to have a good estimate of what costs they need to pay, they will be more likely to choose a franchise that is right for them and be able to succeed.





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John Power
John Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website

Anne Barr
Anne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website

John Brennan
John Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website

Jay Kubassek
(Jay's Full Bio: EvanCarmichael.com/jaykubassek)  In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.

 

As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)

 

Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. 

 

Jay resides in NYC with his wife Jamie, son Milo and dog Cooper.  Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website


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Diarmuid Kieran
(Visit Diarmuid's Website) Webmaster for franchise opportunity sites network.

Diarmuid Kieran is a Platinum author on EvanCarmichael.com
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