Franchising Frequently Asked Questions
Here are a few questions we're most often asked when business owners are looking for answers about how to franchise. If you don't see your question listed here, please Contact Us and we will be happy to answer all of your questions.
Why Should I Franchise My Business?
Who is The Franchise Maker®?
Are all the businesses on your web site clients you have franchised from start to finish?
Does The Franchise Maker sell franchises?
How do I make money from franchising?
My business is like nothing else out there. Do you have experience with unique franchise models?
How do I know what franchise fees to charge? And what about royalties? I don’t want to give the franchise away, but I don’t want to charge too much either.
I’ve already got my logos trademarked and registered. Is that a problem?
How do I know if my business is franchisable?
Do you require that we give you equity in our business for your services?
What do I need to bring to the table to start franchising?
Why Use The Franchise Maker to help Franchise my business?
Is franchising safe for me (how is it regulated)?
How does a down Economy affect Franchising?
How much will it cost and how long does it take?
As a Franchisor do I need to show financial stability?
Why Franchise, rather than open up more locations?
What are franchise registration states?
How soon can I begin the franchise process? What do I fill out?
Why Should I Franchise My Business?
Because you want to grow your business, take it to the next level, using the most cost effective and widely endorsed method of expansion. Perhaps you have identified a unique way to provide a service or you have a proprietary product offering; maybe you have hired employees only to find that once they leave you, they become your competitors and you then realize you should be charging for such knowledge; or you have thought about expanding your business into other markets, but do not want to take on the cost of opening up satellite locations. The bottom line is that businesses take the leap into franchising for many reasons. If you are passionate about what you do and really want to teach others how to operate a business like yours, then it might be worth exploring how to franchise. Franchising is simply a solution and an industry that has put thousands of businesses on the map, transforming local businesses into nationally recognized brands. The Franchise Maker will help you identify if franchising is the best vehicle of growth for you.
The Franchise Maker is a franchise development firm that specializes in turning businesses like yours into a franchise package. The Franchise Maker provides the complete solution for businesses that want to experience accelerated growth through franchising and has assembled teams of professionals (see our picture) to assist with every aspect of franchising at reduced flat rates. The Franchise Maker does not sell franchise opportunities, does not use third parties to create Franchise Disclosure Documents and does not ask for a percentage of your company as compensation (fee-based services only). The Franchise Maker is a professional franchise development firm that makes franchising easy, fun and affordable.
Are all the businesses on your web site clients you have franchised from start to finish?
Absolutely, don’t be fooled by other web sites flashing up a bunch of logos misrepresenting themselves as having franchised those businesses (in most cases those logos are simply businesses these companies represent or have represented when selling franchises). All of the companies on our web site are businesses we have taken to franchise from start-to- finish. We craft all Franchise Disclosure Documents (FDD) from scratch and have had 100% success rate, including the tough registration states. There are no smoke and mirrors with us. Some others will only create the FDD. We have a comprehensive franchise development program and team that includes everything and everyone you need from attorneys to web developers. We will even prepare your franchise marketing materials, teach you how to qualify franchise applicants and show you where to advertise.
Does The Franchise Maker sell franchises?
No, we are not a franchise broker and we do not market or sell any of our client’s franchise models or any other assortment of franchise opportunities. Separating the development process from the selling process means that we don’t have any hidden agendas when working with you. Some companies will overlap franchise development and franchise brokerage and tie in huge commissions for themselves or (here is a good one) expect equity in your business as part of their compensation (see our learning center on this topic).
How do I make money from franchising?
When franchising your business there are many different ways you (as a franchisor) can generate income. (1)The franchise fee is a one-time fee you collect to reimburse you for the training as well as all of your assistance in helping set someone up to operate a franchise. This is a significant fee and is intended to offset all of your upfront training cost. Now you will get paid for your knowledge instead of giving free advice; (2) You will receive ongoing royalties for your continued support and guidance, use of your name and systems you have developed. Royalties are typically a percentage of gross revenues earned by franchisees; and (3)You may require franchisees to purchase products and/or specialized services directly from you. These are just a few of the ways you can use the power of franchising to create serious profits and cash flow. We can go into further detail when you contact us.
My business is like nothing else out there. Do you have experience with unique franchise models?
Yep, we sure do. Anyone can franchise a hot dog business, it is the businesses that are unique and different that really excites us (see client comments). We definitely have franchised (and currently are franchising) some unique business models. Remember, all of our documents are created from scratch. That means that from the start, the uniqueness of your business is built into the Franchise Disclosure Document. Furthermore, The Franchise Maker has been working in the franchise industry for nearly twenty years and has been involved with many different models. Needless to say, the uniqueness of your business model will be captured in our franchise development processes.
How do I know what franchise fees to charge? And what about royalties? I don’t want to give the franchise away, but I don’t want to charge too much either.
We don’t expect you to have any of these answers. Once we bring you on as a client, we will do a market study of other like and kind businesses out there already offering franchises. We will compare your deliverables to others and position you aggressively so when you start awarding franchises (notice I did not say selling) your franchise opportunity will be attractive. Unlike attorney firms, we do not just provide you with a twenty plus page packet or questionnaire that you are expected to fill out already knowing these answers. Not to worry, we will guide you through it all using a bit of business common sense.
I’ve already got my logos trademarked and registered. Is that a problem?
Nope, we have worked with many clients that have already completed certain elements of what is needed when franchising. If you have not done anything regarding trademarking, no worries we have domestic and international patent and trademark attorneys as part of our franchise development services.
How do I know if my business is franchisable?
Well for starters the business must be up and running (preferably for at least one year). What are your reasons for franchising, is there a demand for your services and/or products, is the business your operating scalable and what are the ways you generate revenue (just to list a few questions). We will ask you a series of questions, like these, to determine if your business makes sense to franchise (see our learning center on should franchisor be my next job title). FYI, statistically 90% of businesses that we talk with about wanting to franchise, we turn away and suggest that they do not franchise. In our opinion, might as well save them money, time and frustration.
Do you require that we give you equity in our business for your services?
No we don’t. And if anyone does ask you to give up equity, turn around and RUN! This is something new that has popped up over the last year, go figure. It’s like hiring a general contractor to build your house and the general contractor asking for a piece of the action each time the house increases in value, I have never heard of this happening. Asking you for equity, leave it up to a hungry franchise broker to come up with this one (see our learning center on franchise brokers). Our franchise development program is a flat fee. You will know exactly what you are spending at all times. You keep your equity, you maintain control and you call the shots.
What do I need to bring to the table to start franchising?
A business model that meets our criteria, the right attitude, enthusiasm and a willingness to do what it takes to make a positive difference in the lives of many people. You must be committed to advertise and market your franchise opportunity. You don’t have to take any classes or read any manuals. During our franchise development process, we’ll go through each detail with you, step-by-step and you will become well-educated in your new franchise model so that you are able to speak about all aspects of your franchise opportunity to potential franchisees.
Why Use The Franchise Maker To Help Franchise My Business?
Quite simply, to save time, money and aggravation! The Franchise Maker is your turn-key solution for your turn-key business. We have the solutions to meet your needs. The Franchise Maker will provide you with all of the facts and unbiased information you will need to successfully franchise your business. The Franchise Maker will quarterback the entire process to franchise your business resulting in a complete franchise package. From the creation of your Franchise Disclosure Documents to a comprehensive franchise qualification process for all franchise applicants, The Franchise Maker team does it all.
Is franchising safe for me (how is it regulated)?
Anything you do involves risk. The Franchise Maker helps you to minimize that risk. While it is true that franchising adds creditability to businesses yet it is powerful yet dangerous at the same time. Powerful because of branding, exploding growth and culture that is created. Dangerous because when not done correctly destroys the brand and most importantly the lives of many who pour their life savings into the business. More than half of all new franchise systems fail each year. Some of the most common reasons for failure are due to lack of money to attract franchise applicants, poor training and corporate support for franchisees. Franchising is not simply about signing contracts and selling franchises. Those who do not take the time to orchestrate all the pieces correctly, do not take the franchise development process serious and try to bootstrap operations have a greater risk of failure.
As a franchisor, it is your responsibility to provide all training, industry updates, marketing strategies and continuous support necessary for franchisees to succeed. Franchisees are your customers. Your success as a franchise system is dependent on their success as an operator.
Both Federal and State Governments regulate franchises. This means that every franchise system is required to provide prospective franchisees with a disclosure package referred to as a Franchise Disclosure Document (FDD). This is one of the things that separate a franchise system from a licensed opportunity and why so many people invest in franchises (see our learning center for the definition of a franchise). Franchise systems are regulated to protect the franchisee, have a lower risk of failure and gives added creditability to your business model.
How Does a Down Economy Affect Franchising?
Remember that franchising is countercyclical to the economy. History has shown that when people lose their jobs and/or faced with layoffs or early retirement they turn to entrepreneurial thoughts for someone wanting to start their own business (see our learning center on differences between entrepreneur and business owner). Remember the perception of franchising is that it is “safe” therefore making it an attractive offer. Add on top of that, franchise concepts that are home-based or mobile requiring very little overhead expenses and we have the ingredients for a perfect franchise sales climate. Smart franchisors understand the opportunities in a down economy and take advantage of them.
How Much Will it Cost & How Long Does It Take?
The Franchise Maker is sensitive to your needs to minimize costs and believes you should spend your money on advertising for franchisees or on initiatives that will further enhance your entire franchise system. Fees for our services are broken down into different phases and you can choose to pay as each phase is completed. This is a Pay-As-You Go program where you do not have to commit to a large sum of money up front. After receiving a small retainer, we begin work immediately. In some cases, the franchise development process takes 90 days before you are ready to sell franchises. Our Pay-As-You Go compensation program gives clients added confidence in our services since the risk is shifted on us to perform for you. To learn about our Pay-As-You Go program or discount offered to those who wish to pay our fee upfront, see our series of videos that explain these costs in greater detail.
As a Franchisor Do I Need To Show Financial Stability?
As a franchisor you will not disclose any financial information for your existing business however, as a franchisor you will need to show financial stability. You must be funded beyond the franchise development stage of becoming a franchisor. At minimum, you must show financial strength to provide for the obligations you will have to your franchisees which will include: franchise training, administrative and pre-opening operational support, ongoing research and development to enhance the entire system. Let’s not forget to mention that FDD requires current audited financials of the franchisor. How much you fund your franchise system takes into account many factors (see our learning center on funding).
Why Franchise, rather than open up more locations?
The answer is simple. Rather than use your money opening satellite locations and hiring employees, who do not care about your business to run it, use the resources of an entrepreneur who has skin in the game, to brand your business using their resources. If branding your business and consistency of your service and/or product is important to you, then franchising is the best way to go. Keep in mind there is no fiducial responsibility between you and your franchisees. As a franchisor you maintain control and it is the optimal way to expand your business into other locations. When franchising is done correctly, it is not unusual for franchisees to have businesses more successful than the franchisor and the loyalty built within the franchise system is priceless.
What are franchise registration states?
An unpredictable hurdle in franchising is the registration of the franchise in registration states. There are fourteen states that require a stricter process before you can begin to offering franchises for sale. The registration states require that your FDD is submitted to them for approval which means an attorney on staff reviews your FDD comparing it to the federal guideline and their more stringent state guidelines (all for the purposes of protecting the consumer, in this case the franchisee). California is one of the strictest of all fourteen states. The approval process to begin offering the sale of franchises in a registration state can take a few weeks or several months depending on various factors including how well the FDD is written. We have had 100% success in the registration states. Each registration state is different and timing for approval can vary. For additional information on registration states, contact us.
How Soon Can I Begin The Franchise Process? What do I fill out?
Give us a call. You have questions and we have answers. We will have a series of conversations so that we understand your business and you fully understand all the steps necessary to franchise your business. After we get to know each other, you may be able start immediately. We limit the number of clients we bring on each calendar month. We will move as fast or as slow through the franchise development process as you dictate. The Franchise Maker, like the mailman, we deliver. Contact us.
Contact us NOW to Franchise YOUR Business