More Franchising Questions Answered

In this blog, I will address more of the Frequently Asked Questions about franchise programs:

Q. What makes National Franchise Associates different from other franchise consulting firms?

A.  At NFA, we approach franchise consulting by looking at developing a franchise program from both the franchisor’s and the franchisee’s point of view.  This approach allows us to provide our clients with the best possible franchise consulting service through:

  • Broad franchise consulting experience that results in workable franchise programs
  • Over three decades of proven expertise in franchise consulting and the development of successful franchise programs
  • Offering our franchise consulting clients substantially lower fees
  • Developing franchise programs tailored to the specific franchisor’s strengths and market niche
  • Creating franchise programs with built-in advantages over existing competitors
  • Knowing what other franchise companies have found successful, saving you valuable time and eliminating many potentially serious mistakes
  • An integrated approach that results in a franchise program that meets your goals and needs
  • Offering on-going franchise consulting support to new franchisors

Q.    How much time will it take to put together a franchise program?  

A.  Again, NFA offers you flexibility in this area, and the answer depends upon your needs and time frame.  Developing a franchise program tailored to you and your company requires input from you.  If you have more time to devote to the franchise consulting project each week, we can complete the work in a few months.  We can also lengthen the target completion date if you have limited time available to work on it.

FAQs In Franchising

In my over 30 years experience in franchise consulting, people frequently ask me, “Why does one franchise program flourish while another franchise program disappoints?” There are many causes for succeeding or failing in your franchise program.

In this blog, I will address three Frequently Asked Questions about a franchise program:

Q. Why can’t I just call my program a licensing program and omit the documentation required for a franchise program?

A. Numerous court cases have determined a franchise program exists if it has these three fundamentals: 1) paying a fee (in some cases, even a fee as little as $500); 2) providing assistance; and 3) using the same name. You can call it whatever you wish — a license, distributorship, cooperative, association, join venture – if it has these three fundamentals, it will be deemed a franchise program. As a franchise program, your business must follow applicable federal and state laws.

Q. Why should I create a franchise program?

A. There are a number of reasons, including the following:
1. A franchise program allows you to expand your brand using other people’s time, money and managerial talents. As the growth of most businesses is limited by money, franchising typically can result in faster expansion than opening company-owned units.
2. A franchise program gives you the potential to make substantial profits through initial franchise fees, royalties, franchise real estate development programs and selling franchisees products or services. For example, a franchise program can generate per unit royalties of $50,000 to $100,000 or more annually.
3. You may be able to retain more ownership of your franchise company than if you utilize outside investors or venture capitalists for funding.

Q. What does it take to develop a franchise program?

A. In 36 states, you are only required to properly prepare a Franchise Agreement and Franchise Disclosure Document. In 14 states, you must register your franchise program with state regulators before franchising there. NFA also strongly advises you to create a comprehensive Operation Manual or Operation Manuals, spelling out all the details of launching and running the franchise location. In addition, you should develop a means of marketing your franchise program.

More next month!

Franchise Marketing Program

In my over three decades running a franchise consultants firm, I am often asked “What makes one franchise marketing program succeed while another franchise marketing program doesn’t?” Rarely is there a single reason for success or failure in a franchise marketing program. Here, I will examine some of the factors that can help you succeed in your franchise marketing.

The first step in designing an effective franchise marketing program is to develop your target Franchisee profile. Obviously, if you can identify the person most likely to want to be your Franchisee, you can tailor your franchise marketing to target that person. Even more importantly, if you focus on your target Franchisee as you create your franchise program, you can structure your franchise offering to be particularly attractive to your most likely prospects.

What type of person are you seeking with your franchise marketing programs?

Ask yourself:

  • What kind of experience is required to succeed in this field?
  • Are we seeking owner/operators or investor owners?
  • Is this franchise more likely to succeed with multiple owner operators?
  • What skills and knowledge are necessary to succeed in this business?
  • Are any special licenses, permits or certifications required?
  • Do I intend to sell multiple franchise locations to one person?
  • What is initial investment is required?
  • What annual income is likely to satisfy my Franchisees?
  • What attributes are needed?
  • What is a fair return on investment for this franchise?
  • Who is likely to be attracted to this business?
  • Who is prohibited from operating a business of this nature?
  • What type of personality succeeds in this opportunity?
  • What emotional rewards does my franchise offer?

While not all these issues may apply to your franchise, many of them will. You can easily make your franchise opportunity more attractive to your likely prospective Franchisees by building your franchise program with their wants and needs in mind. You can then create your franchise marketing campaigns to best reach these target prospects.

After determining the prospects to target with your franchise marketing, you can then decide how to best connect with those prospects. Is there a particular marketing method or medium that narrows the focus on your best prospects? Set your budget, and then decide how to best allocate your franchise marketing dollars.