| Frequently Asked Questions | Franchise System Development |
Q. What
Can FranchiseOfficer Do For Me?
Contrary
to popular perception, franchising is a complex industry. It is not as
easy as selling your current business model to interested parties who wish
to replicate it. There are many items that need to be executed in order
to franchise successfully and legally. Attempt to develop a franchise program
on one’s own is not a wise choice. We have seen many organizations
struggle tremendously because they did not properly develop a complete
and thorough franchise program. There are two kinds of franchise companies:
Those that that lack structure and quality and those that are well structured,
sound and successful. If you look at many successful franchisors, you will
find that most hired the right experts in the beginning to develop their
franchise programs. At FranchiseOfficer, we can help you
develop your entire franchise program. Our services cover every aspect
of franchising from documentation to branding. You are without a question
the expert of your business, however, franchising is a business on its
own and we are experts in franchising. If we are able to fuse your expertise
with our expertise, the results will always be outstanding.
Q. What Guarantees My Success As A Franchisor?
The simple
answer is that there are no guarantees. However, there are great rewards
when a franchise system does succeed. Providing that you have an attractive
business model with a history of success, the odds of success are in your
favor. If your business model can consistently replicate the success of
the original business then the odds are very good. If you have enjoyed
respectable average gross sales and profits and have a well developed franchise
system, your franchisees should enjoy similar results. For example, based
on average gross sales of $300,000 per franchise and the development of
even 20 franchises, you could potentially be yielding $480,000 in royalty
revenue per annum. Another factor that will influence your success as a
franchisor is how devoted you will be to franchising and your financial
wherewithal. When you decide to franchise you have to be 100% committed
to franchising. Franchising should never be looked at as a part-time endeavor.
By making the decision to franchise, you are starting a new
business. It must be taken seriously in order to enjoy success.
Q. How Many Franchises Can I Expect To Develop In My First Year
As A Franchisor?
It really
depends on how you run your business. Will you be committed to franchising?
Will you hire the right franchise development people? Will you aggressively
promote franchise opportunities? These are just some of the questions that
you will need answer. However, the average new franchise company can expect
to develop approximately 6 franchises within its first year.
Your growth will be related to how much you can contribute to franchising. For
example, companies that spend $1,000 per month on promoting their franchise will
grow at a slower pace when compared to companies that spend $10,000 or more per
month on promoting their franchise opportunities.
Lastly, despite what you may
believe or have been told, your first year as a franchisor will be the most challenging.
Many prospective franchisees will be hesitant to purchase a franchise from a “new” franchisor.
Not many people will want to be the first franchisee. However, once you develop
your first few franchises and overcome that barrier, you will begin to experience
faster growth. Providing that your franchisees are happy and well-supported,
they will be your best asset in offering potential franchisees positive validation.
Having good validation from existing franchisees is a substantial reason
why some franchisors excel. Caring about your franchisees and supporting
them is essential to not only their success but yours as well.
Q. How Do I Know That I Will Be Able To Develop Franchises?
There
are no guarantees. Being able to develop franchises requires certain skills,
strategy and patience. Franchise sales can be complex at times and you
will need the right people and mentoring in order to achieve your goals.
Not everyone has what it takes to sell a franchise. However, with the help
of FranchiseOfficer, we can provide you with all the training
that you will need. We can even develop a customized sales and marketing
system tailored to your franchise. In addition, you can also take advantage
of our vast network of franchise brokers and alliances to help you expedite
your franchise development objectives. Every month our network of franchise
brokers will deal with anywhere from 2,500-5,000 prospective franchise
buyers. That’s 30,000- 60,000 prospective franchise buyers per year.
We’re quite confident that a respectable percentage will be referred
to your franchise opportunity. Partnering with FranchiseOfficer would
be a wise choice for growing your franchise system quickly and properly.
Q. What Do The Franchise Laws Require?
FTC Rule
436 requires that you provide prospective franchisees with a disclosure
document known as the Uniform Franchise Offering Circular (UFOC) also referred
to as the Franchise Offering Circular, Franchise Disclosure Document or
simply the Disclosure Document.
Additionally, state laws require that you register or file those documents with
their specific agencies.
Within Canada, there are two provinces that govern franchise
sales: Ontario (Arthur Wishart Act) and Alberta (Alberta Franchise Act). They
require that a franchisor furnish a prospective franchisee with a disclosure
document, however, franchisors do not have to register or file with either province.
Q. What Defines A Franchise?
Below
are the three most common characteristics of a franchise.
- Required Payment(s) A business is required to pay
the business seller for the business concept a sum of more than $500
within a six month period. This includes payment such as franchise fees,
royalties, payments for services or support and possibly products.
- Trademark(s) - A business is given the right to use
another company’s trademark, service mark or trade name for the
purpose of advertising and distributing the same goods and services.
- Significant Control and/or Assistance - Some examples include mandatory training programs, marketing criteria and campaigns, staffing policies, accounting procedures, location and site approval, site appearance, hours of operation and an operations manual that must be followed.
Should a franchisor develop a business offering which includes all three combined components listed above, the franchisor’s offering shall be considered a franchise offering in the eyes of the FTC, States and certain provincial regulatory agencies.
As a franchisor, you will be required to furnish prospective franchise buyers with the required disclosure documents and forms. A franchisor must also comply with all prescribed legal procedures outlined by governing regulatory bodies. Failure to comply may result in but is not limited to fines of up to $10,000 per violation, a rescinding of all franchise agreements and repayment of all monies received from franchisees. Historically, some negligent franchisors have been sued for hundreds of thousands, even millions of dollars.
This is why it is critical to employ the right experts to help you navigate the complex franchise waters. With the right team, franchising doesn’t have to be complicated or intimidating. With the right team, franchising is quite simple.Q. How Much Does It Cost To Franchise My Business?
Franchising
a business can cost as little as $15,000 to over $200,000. It all depends
on the type of business being franchised and what the franchisor would
like to achieve. However, on average, a new franchisor will spend approximately
$50,000 to develop a market ready franchise program..
Q. How Long Does It Take To Develop A Franchise System?
Typically
3 months to prepare the necessary documents needed to properly and legally
franchise a business. However, it really depends on the scope of the project.
Q. What Do I Have To Contribute To FranchiseOfficer?
Your time.
We will need to work closely with you in order to fully understand the
nature of your business. If a consultant ever tells you that they don’t
need your involvement, we highly recommend that you look for another consultant.
How can someone know your business better than you and put it all into
writing? You know your business better than anyone and it is critical that
you spend the needed time with our professionals. This way we can gather
the information that we need and also provide you with the proper advice.
We also have a very thorough questionnaire that you will need to complete.
By completing this questionnaire, we will eliminate a great deal of consultation
time.
Besides your time, we will also need documentation that is relevant to your business
and how it operates such as operating and training materials, business and employee
forms etc. Be assured that all exchanges are 100% confidential and we will sign
a non-disclosure agreement with you before any information is exchanged.
Q. What Are The “Necessities” Needed To Franchise?
We consider
the necessities of franchising to be the following:
- Franchise Strategic Plan
- Franchise Disclosure Documentation
- Franchise Agreement(s)
- Operations and Training Manual(s)
- Franchise Marketing Materials and Website
Q. Does FranchiseOfficer Offer Discounted Rates To Clients
Who Pay The Fees Up-Front?
Yes.
Should you pay our fees in full upon completion of any project, we
will offer you a 10% discount.
Q. Can The Services That FranchiseOfficer Provides Be Financed
Over A Period Of Time?
Absolutely.
Should you wish to have a payment schedule with FranchiseOfficer,
we offer in house financing to those companies that qualify. To learn
more, ask your FranchiseOfficer professional about
our financing options.
Q. How Does FranchiseOfficer Compare To Other Companies Providing
Similar Services?
We would
first like to mention that we have a few competitors that we admire.
Some of them produce excellent quality work. We have seen their work
and we think that they do a very good job.
However, some competitors really concern us. They claim to be experts in the
field of franchising when in fact they know and have experienced very little.
Choosing the right company to help you franchise your business should be based
on the company’s knowledge and experience. In our opinion, once owning
a franchise is not sufficient enough to call oneself a franchise expert. On the
contrary, don’t be fooled by those consultants who use big “fancy” words.
You want to work with a knowledgeable company that keeps things simple. That
is exactly what FranchiseOfficer is able to do.
At FranchiseOfficer, all of our professionals must have a solid
track record of success in franchising. Additionally they must go through an
intensive training program that entails a great deal of study and apprenticeship,
regardless of their previous experience. It takes six months before one of our
consultants can refer to themselves as a FranchiseOfficer Professional.
When
it comes to the quality of our work versus our competitors, our quality is exceptional
and in most cases, less costly. If that wasn’t enough,
we also offer flexible financing terms.
Q. What Are The Next Steps?
If you
are interested in franchising, then you have questions that need to be
answered. The next step would be to contact us and
speak with a FranchiseOfficer professional.
Preliminary consultations are always free. Click
here to learn more…
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Information:
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