THINGS YOU SHOULD KNOW WHEN PURCHASING A
FRANCHISED CONCEPT:
COST: (in
addition to normal operating expenses):
You can expect to pay an initial
franchise fee of several thousand dollars to several hundred thousand, depending
on the franchise. Other costs include licenses, insurance, construction,
rent, furnishing, fixtures, equipment and inventory.
Continuing royalty payments on the
business gross income. In general is about 5% of the gross, but amounts
vary depending on the franchised concept. Plus an average of 2% for
advertising expenses. Again, this amount would vary depending on the
franchised concept.
CONTROL:
The franchisers would typically control
over site approval. The franchiser might not approve the site you want.
Design or appearance standards. Some franchisers require renovations or
seasonal design changes.
Restrictions on goods or services sold.
Restaurant franchisees might not be able to add popular menu items. Restrictions
of sale territory. Restrictions on the method of operation. Restrictions
on the use of certain advertising.
TERMINATION OR RENEWAL:
Franchising agreements are subject to renewal;,
typically every 5, 10, 20 years. The franchiser might decline to renew
your contract if, for example, you balk at corporate mandate changes. The
franchiser might increase the royalty payments or impose new design
standards and sale restrictions. Your territory could also be reduced.
Other conditions and restrictions would
apply. Your attorney should be well versed on franchise law. Check out the
franchiser's track record with its franchisees. Talk to a few of their
franchisees, try to determine what type of support they are getting, and
if they are satisfied with their relationship.
To Apply, CLICK
HERE. For more information, please contact us
via e-mail.
THINKING OF FRANCHISING YOUR BUSINESS?
If you own a business and would like to franchise the concept,
let us evaluate your business at no cost or obligation. If your business
is qualified, our involvement would include "hands-on"
assistance with the development of a "turn-key" operation,
including, business and marketing plans, financial analysis and projections, agreements, location,
staffing, licensing, equipment, all other related matters and continued
support.
To Apply, CLICK
HERE. For more information, please contact us
via e-mail. Thank you for your visit.
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