What does it cost to franchise my company?
As you begin to consider franchising as a business expansion method, you need to consider the investment it will require. We like to provide prospective clients a perspective on the items required to develop a robust and successful franchise operation and how are fees compare to other franchise development companies. We also like to provide the timing on these activities, so you have an expectation prior to deciding to franchise your business.
Below are the most common franchise development services we provide when developing a clients franchise operation We begin with those that provide the minimum LEGAL requirement for non-registration states and continue with services that are the foundation of highly successful franchise companies. No legally required filing or highly developed process document guarantees success, but we have found over the past 30 years that investing in more than “the minimum” creates a much higher chance for successfully growing your business through franchising.
We also provide a comparison of what most franchise development firms or franchise attorneys offer versus what FranSource offers for approximately the same investment cost or lower. Please note that this is simply for perspective and may not reflect your actual experience and cost estimates.
Package 1 – Minimum Requirement (timing ~6-10 weeks):
- Franchise Disclosure Document (“FDD”) + Exhibits
Package 2 – FranSource’s Minimum Recommended Documents & Services (timing ~3-6 months):
- FDD + Exhibits, including:
- Industry Research / Franchise Competitive Report
- Initial Franchise Training Program
- Intercompany License Agreement
- Area Developer Program and Agreement
- Franchise Reporting Requirements & Performance Standards
- Franchise Territory Criteria
- Site & Location Specifications for the Franchise Business, if applicable
- The Franchise Fee, Royalty Fee, Brand Fund Fee and Other Sources of Franchise Revenue
- Referrals to Franchisor Third-Party Service Providers (e.g., CRM, Master Real Estate Broker, Franchise Funding Companies)
- Franchise Operations & Policy Manual, including the following advisement:
- Franchise Communication & Support Programs
- Franchisor Staffing Requirements
- Franchise Inspections & Mystery Shops
- Franchise Sales Process, Manual, and Forms, including:
- Identification of the Ideal Franchisee
- Franchisee Solicitation Landing Page Copy
- Online Franchisee Brochure Copy
- Online Franchisee Presentation
- Initial Franchisee Sales Support (includes sales support for the first 5 franchises sold)
- 12-Months of Additional Franchise Consulting
Package 3 – Additional Legal, Operations, Marketing, and Sales Services (timing varies based on services engaged):
- Legal (if applicable)
- Trademark & Copyright Filings
- State Registration Filings
- State Exemption Filings
- Master Franchise/Sub-Franchisor FDD
- Area Representative FDD
- Advertising Cooperative Agreements
- Operations (if applicable)
- Employee Training Manuals
- Food Prep & Recipes Manual
- Marketing
- Brand Audit
- Marketing Audit
- Brand Development and/or Enhancement (Corporate Identity)
- Brand Style Guide or Brand Book
- Franchise Marketing (Franchisee Lead Generation)
- Go-to Market Plan
- National Brand/Awareness Advertising
- Local Store Soft and Grand Opening Marketing
- Ongoing Local Store Marketing and Support
- Sales
- Franchise Sales
- Franchise Brokerage
Like every business, each franchise concept is unique. When comparing the cost of various franchise development firms, be sure to review what each firm provides as a deliverable, and how much support is provided once the documents are developed. We engage new clients regularly who worked with a different franchise development company and found that answering the question of “what does it cost to franchise my company” versus “what will I receive” has many different answers. Many of them found that they did not even recognize their businesses in their FDD and Franchise Operations Manual. To cite one recent example, we worked with a client in the youth swim lesson industry that had restaurant industry language throughout its FDD. Another franchise company became a FranSource client because they discovered after training their first franchisee that their Franchise Operations Manual was incredibly deficient and provided vary little business operational procedures. And a third franchise company became a client when it realized it did not have a robust franchise sales system or even a Franchise Application that was promised to them by the former firm. Don’t become that next “victim” by going with the lowest cost provider. It is vitally important to your success to understand the value (cost + services + quality) before making a final decision.
FranSource believes our job isn’t just to draft franchise documents or just keep your franchise company compliant. Our team believes that our job is to set your business up as a successful franchise company that attracts qualified franchisees who will also be successful. Whether your goal is to be a regional, national or global franchise brand, or to create a franchise company with an achievable exit strategy, we would count it a privilege to join you on that journey.
While we aren’t the lowest cost provider, as you can see above, we are far below the average of most franchise development firms. And yet, we provide the broadest range of services so you don’t have to find one-off services from multiple suppliers. At FranSource, you receive all the services you need to both create and expand your franchise company for decades to come. And as far as quality, we believe there is no equal.
Contact FranSource today for a free, no obligation review of your business model and its readiness to franchise, and to learn more about our services.
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