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Automotive Franchise
 Are You Right for a Retail Franchise
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Make Money with Java
An entrepreneurial look into the highly successful coffee business in America
Financial Business Franchises
A Dog Day Care Franchise Is It Really Worth It
Franchising Pros And Cons
Buying Your First Franchise
Myth Guided Franchise Marketing Disspelling the BYOB Myth
Tips for Researching a Franchise Business
Advantages Of The Franchise Business And Why They Are Considered Such Great Opportunities
All You Ever Wanted to Know about Sandwich Franchise investments Are You Hungry for a Great Business
Business Opportunity Creation
Searching for the Right Franchise Opportunity
The Booming Handyman Market and Franchising Opportunities
The History of Franchising The Creation of the Franchise Business
New radio show explores the American dream of being the boss
Things You Need To Know Before Buying A Franchise
A franchise can present a great opportunity for business
Franchise History
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Franchise Opportunity - Questions To Ask The Franchisor - #1
Finding The Right Franchise
Whether it's hamburgers, pizza, telecom, coffee, Internet,
muffler parts, or seniors' services, there are Franchise
opportunities available to evaluate. There are great Franchise
systems, good Franchise systems, and bad Franchise systems. The
challenge is to ask the right questions to find the right system
that will fit your goals and dreams. The key is to ask the
questions - and listen closely to the responses. Only then can
you determine if the Franchise opportunity is the right fit for
you. So whether it's food services like burgers or coffee,
professional services like telecom or IT, or manual services
like cleaning or oil changes, ask the questions and record the
answers.
Why Do I Pay A Franchise Fee?
Franchising is a strategy that the Franchisor uses to achieve
its objectives, including market penetration and market
domination. Franchises are granted or awarded to a qualifying
Franchise Candidate that has similar objectives in their own
marketplace. That Franchisee will have the responsibility to
fully implement the operating and marketing systems of the
Franchisor in their defined area for a specified period of time.
The relationship is not generally one of parity.
If it were a relationship of parity, the Franchisee would take
on a great deal more responsibility, and of course, liability
and risk as well. So the relationship is not one of actual
partnership in the legal sense. However, good Franchise systems
will generally recognize their Franchisees as
Strategic-Partners, meaning they are in a partnership of sorts
that is aimed at achieving unified goals, but not one of legal
partnership or equity.
The Franchise Fee is the cost of putting the Franchisee into the
business of the Franchisor, not as a partner, but as a
participant. Costs include:
1) The development costs of all of the elements of the
Franchisor's system 2) Training the Franchisee to use those
system elements and programs 3) Marketing and advertising to
find Candidates 4) Costs of qualifying Candidates including
rejecting many unqualified Candidates 5) Salaries, travel, &
administration 6) Legal expenses to draft agreements defining
the methods & terms for the Franchisee to participate, etc.
It is the Franchisor's assessment to cover those costs as well
as a reasonable markup. In other words, it's the entry fee to
the point of the completion of the initial training programs.
To the Franchisee it must represent a reasonable fee to allow
you to become a part of the existing system, including all of
the training programs that are a part of that system, to help
you reach your own business goals.
When asked about the Franchise Fee, the Franchisor should have
this concept clearly defined in their approach to Franchising.
They should recognize that the Franchise Fee should be
reflective of the value of entry into a well-developed,
comprehensive system for the participant Franchisee. They should
also recognize it as the recovery of costs to find, qualify, and
grant legal rights to participate in that system to the very
best Franchisees for the Franchisor's business.
About the author:
Dennis Schooley is the Founder of Schooley Mitchell Telecom
Consultants, a Professional Services Franchise Company. He
writes for publication, as well as for
schooleymitchell.blogging.com and franchises.blogging.com, in
the subject areas of Franchising, and Technology for the Layman.
http://www.schooleymitchell.com, 888-311-6477,
dschooley@schooleymitchell.com.
Written by: Dennis Schooley, BBA, CA
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