Did you know that all franchises were once independently-owned businesses? You might be at the point where you have built a successful business from the ground up and are considering franchising.
The first question you should ask: Is your business “franchisable”?
(Generally, you’ll need between $50K – $250K.)
When you decide to franchise your business, you will essentially award investors with the rights to sell your products or services through an approved territory. An initial franchise fee is paid to you (the franchisor) by the investor (the franchisee) for training on how to operate the business, guidance on licensing and site selection if required, in return for the rights to operate a business under the franchise trademark. Ongoing monthly royalties are then paid to the franchisor for continuous support and training for the life of the franchisee’s business.
While franchising may be a great path for growth, it is a long-term investment and could be used with a combination of other distribution means. It is not uncommon for franchise companies to grow with 1 or more of the following channels, in addition to selling franchises:
The initial development of a franchise program requires an investment of both time and funds. However, the cost of professional advisors to help you properly develop your franchise is typically less than the cost of opening one additional company-owned location. Hiring a credible and experienced franchise consultant will help you through the process.
Take control of your future and define your journey today!