In my over three decades as a franchise consultant, I am often asked “What makes one franchise program succeed while another franchise doesn’t?” Rarely is there a single reason for success or failure in a franchise program. In my franchise consultant blogs, I will examine some of the factors that can help you succeed in your franchise program.
In this month’s franchise consultant blog, I will continue tackling franchising FAQs:
Q. Why can’t I just get somebody else’s franchise legal documents and substitute my company name?
A. You certainly can do so. However, as most experienced franchise consultants will tell you, what works for one franchisor does not necessarily work for another. There are a number of business decisions (not necessarily legal issues) that must be addressed when developing a franchise program. Carefully working through these issues results in a franchise program that is both more lucrative and easier to attract qualified franchisees. The following are just a few of these issues:
- Size of the franchise territory
- Amount of the Initial Franchise Fee
- Amount, frequency and basis for determining the royalty or service fee
- Initial training program provided to franchisees
- Mandatory/optional purchases from the franchisor
- Franchise growth strategy
A seasoned franchise consultant can guide you in making the best possible decisions for your particular business and goals.
Remember, depending upon the specifics of your franchise program and the fees charged by the particular franchise consultant, you can easily recoup your investment in developing your franchise program with the Initial Franchise Fee and first year of royalties from the sale of only one franchise.
Q. How large is franchising?
A. Recent industry estimates are that franchising accounts for nearly 50% of the U.S. retail economy.
(More in my next blog)