What is the cost to “franchise your business”. This is a question that comes up often and one where you are bound to find a wide (really wide) range of estimates and opinions. This “cost” issue was recently discussed in Julie Bennett’s excellent Franchise Times Article‚ “Anecdotes Tell Peril of Starting a Brand‚ Yet Statistics Don’t Exist”.
The article addresses a number of issues that potential start-up franchisors should consider. However‚ two of the issues that I would like to emphasize relate to:
In the Article‚ Julie Bennett does a great job of evaluating the experiences of a start-up franchisor who‚ it appears‚ entered the world of franchising at an accellerated pace. That is‚ the start-up franchisor of a child fitness concept‚ hired a large franchise development company (I believe the company was Francorp) and purchased and allegedly paid $86‚400 for a franchising package. The start-up franchisor explains that when she visited with the franchise developer they picked her up in a limo and then proceeded to take her “through everything‚ from concept review through site analysis…” Ultimately this start-up franchisor mentions that she was dissatidsfied with the franchisor developer’s services and‚ ultimately‚ she utilized a different company to redraft her FDD – – at an additional expense‚ of course. Certainly‚ I am not aware of this start-up franchisors particular experience‚ nor do I have a basis to comment as to the franchise developer‚ however‚ I have alot to say about the “franchising process” and the “cost”.
Here are my thoughts:
By the way‚ so in addition to being a franchise lawyer‚ I am also the managing member of a national franchise company (a home maid cleaning franchise) and I can tell you that when it comes to franchising there is a lot to get done. Don’t rush the development process and don’t sign up for services that you may not need.
Category: Start a Franchise
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