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How Much Should I Charge? |
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| Deciding how much to charge for your franchise is part of a much larger process that involves budgeting for your franchise operation in general. Before you can even begin to think of what you’ll charge others for a share in your franchise operation, you must have an idea of what the entire thing is going to cost you! |
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Costs to Consider
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Go back to when you first started your business and pull out your records. There are bound to be costs you’ve forgotten, things you paid for back then and will have to pay for again as you start your franchise that would never come to mind without those records. Some of those might include: |
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| Equipment |
| Location rental |
| Hardware |
| Software |
| Supplies/ Inventory |
| Accounting fees |
| Transportation |
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| All of these costs must be covered in your franchise agreement. Who is responsible for paying them? If it’s you, what are the limits? Most of the time your franchisees will carry the burden of many of these costs, but that information must be spelled out. There should be no surprises once the franchisee signs the agreement. |
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Considering Costs, Expenses, and Fees
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In addition to those earlier expenses, there will inevitably be some new expenses you didn’t anticipate. It’s your job to anticipate as many of them as possible, though, and that’s why you need to take the time to think through your costs. It’s always a good idea to look through your files, contact some contractors, and figure out what your exact expenses will be. Consider: |
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| Initial business costs such as those mentioned above |
| The cost of increased product supplies |
| Wholesale prices |
| Contractor expenses |
| Travel expenses |
| The cost of the initial training |
| The cost of other professionals (accountant, solicitors, etc.) who have assisted you with the franchising process |
| The cost of advertising and marketing your franchise |
| The cost of market research |
| Extra time put in by you and your staff, all of whom deserve compensation |
| What sort of return do you want on your investment? |
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Setting the Franchise Fee
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Before you set a fee, look into what similar franchises are charging. Your goal is to undercut them slightly, because as a new franchise, you want to remain competitive. Remember, you may know how wonderful and successful your franchise will be, but to a franchisee making an investment, you’re an unproven risk. They will need some sort of incentive to invest in your franchise over others; franchise fees can be one such incentive.
In general, your goal is to turn a profit while still remaining competitive. It’s a good idea to consult an accountant with experience in franchising if you have any concerns or uncertainties here.
At this point, you should be able to determine an investment range, a relatively accurate guess of how much your franchise will cost to establish. This won’t be an exact figure, of course; it’s more likely to be a range. That’s okay as long as your finished price falls within that range.
With that range in mind, you’ll be able to set a franchise fee with relative ease. You know how much return you want on your investment, you know how much other franchises are charging, and you know how much of your own money will be invested in this project. With those three facts in sight, you can make a fairly reasonable assessment of what your franchise fee should be. |
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How To Franchise Your Business Info Guide |
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Claim your FREE franchising consultation now
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Request a FREE 'Opportunity Analysis' with one of our experienced
business franchise consultants. During the analysis Franchise My Business will uncover the opportunities that exist within your business.
The detailed report will contain: |
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| Suitability for franchising |
| What you can charge for your franchise |
| The process explained |
| List changes needed to the business to enable successful franchising |
| Market analysis |
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No sales pitch - just good honest advice |
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Call 0845 020 4368 to book your free consultation |
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Our Fees
As you have seen franchising your business will generate a lot of additional cash. This option is also the quickest way to build a very profitable and high value business.
HMA Business Growth Solutions will complete 95% of the work involved in franchising the business. We will cover all legal costs (approx £5K), provide all the marketing material needed and provide a complete plan to recruit franchisees. We will also provide ongoing support and changes to the franchise system as required for a period of three years.
* £9995 + vat payable in 4 monthly payments (£2498.25 + VAT per
month).
This is a heavily discounted rate - we prefer to make the mass of
our fee by linking our fees to your success.
In addition we will: |
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| Advertise the franchise |
| Qualify the potential franchisees |
| Meet all potential franchisees |
| Any franchisees that we feel are suitable will be invited to
meet with you. |
| Close the sale and setup all legal contracts. |
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In return for handling this process and incurring many costs, our
fee will be 20% of the franchise fee. This fee will only be
payable on success.
Isn’t that refreshing - A consultancy company that links payment
to performance.
The exciting part of our service is that it won't cost you a
fortune. We mainly work by charging a small project fee and
accepting a minor percentage of the increased profits that we
create for you. |
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| We like to share in the extra profits we make for you. |
| This makes us highly motivated to achieve major increases in
profit. |
Plus—we guarantee that your franchise will be a success or
we’ll work for you for absolutely nothing until it is or we will
refund your investment.
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| We are not like any other consultancy company you've ever come across. |
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Remember - if we can’t increase your profits dramatically
We’ll work for you for nothing until we do.
The Business Franchising Specialists
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