The industry average for a Franchise Fee is $35,000.  Franchise buyers pay you this fee for the rights to use your trademark, servicemarks and business system.  This fee is used to help supplement your business growth and cover the costs involved in training new franchisees as well as acquiring new franchise partners.

Franchise Royalties - The industry averages for franchise royalties is 6% of gross sales.  This percentage is paid typically on a weekly basis on the gross sales of the franchisee's business.  These royalty fees are paid as part of the ongoing rights to the trademarks, servicemarks and intellectual property.

Development of a secure and defined Distribution channel.  Franchising is a marketing system that leverages a business model and allows you to sell more of whatever business you are in.  Franchisees are dedicated to a particular business system, are required to operate with consistent standards and will be motivated to sell as effectively as possible.  Franchise locations have been shown to perform 20% more efficiently than company locations. 

Franchising requires the payment of an advertising fund and minimum advertising expenditure by franchisees.  Together, these marketing contributions produce a powerful branding mechanism that allows a growing franchise system to promote and market effectively.  Franchise grows brands exponentially faster.

Franchises are given preferences when looking for funding and financing.  Franchise buyers have significantly lower levels of failure than start up businesses do.  This allows banks and investors to take on lower levels of risk when funding new locations of a franchise system.  Bottom line, money becomes more available as a franchise system. 

Franchise organizations are given higher valuations than company owned chains.  The leveraged business model of a franchise system is valuated with significantly higher ratios than company owned units.  The overhead and costs to manage locations are much less in a franchise model than in company owned growth.

1. Since the beginning of the 1900's, franchising has been proven to be an effective model for distributing goods and services ranging from food to professional services.  The Franchise Industry is one of the single greatest conduits to business growth in the U.S. and Internationally.  A franchisee opens for business every eight minutes of each business day, why couldn’t the next one be yours?
2. Franchising allows a business to expand with less capital than most other business development options.  The leverage system and lean management staff of a well run franchise model has a significantly higher ROI than organically grown companies or chains.
3. Franchisees have a consistently higher level of performance, profitability and success than that of company owned locations.  In some franchise systems it has been documented that franchisees when compared to company managed locations will outperform to the tune of 20% more profitability per location.
4. The Current Market – being that it is rather difficult for many white collar professionals to find work that fits their accustomed pay grade offers up opportunities from a franchise marketing standpoint.  People are looking for more entrepreneurial opportunities because they have to.
5. Franchisees will benefit from a proven business model, training and your support.  The franchise model is truly a symbiotic relationship when established and managed correctly.  Both the franchisor and franchisee enjoy working together and each benefits from the other’s involvement.

Contact us for a Free Consultation on How to Franchise Your Business!

(800) 610-0292  /  Info@FranchiseMarketingSystems.com