Franchise Q&A

What are the advantages of franchising?

The top three advantages to you when expanding your business through franchising are speed, people, and money.

To learn more about each one, or whether your concept is even a candidate for franchising, be sure to read the article’ “Thinking About Franchising?”

If I franchise, won’t I lose control compared to company-owned stores?

This is the number one question I get asked.

You do lose the absolute control of firing someone on the spot, which brings its own set of problems, but you’ll gain much more control in other ways.

The article; “Thinking About Franchising?” covers this in pretty good detail under the heading “Hold on Loosely.”

If I use you to franchise my business, can you guarantee I will sell franchises?

This is an excellent question.

Most development firms and attorneys won’t tell you this, but the majority of startup franchisors never sell the first franchise.  Or worse yet, sell a few and then stall.

Some will give you an opinion about how saleable they think the franchise will be, saying things like; “I might buy one of these myself!”

But that isn’t a guarantee of anything.  They just want the development work.

And even we can’t completely guarantee you will sell franchises, but we are so confident in what we do we offer a reduced rate franchise development fee for the right concepts.

With the reduced fee option, we get paid by selling franchises for you on a commission basis following development, which is about as close to a guarantee as you can get.

Said another way:  If we take on your project and front some of the development work, you better believe we believe.

To see if your concept is a candidate for franchising or No Upfront Development Fee, be sure to read the article; “Thinking About Franchising?"

Is an Operating Manual required to start selling franchises?

Yes and not only that, your goal should be a complete, good-looking, well-written Operating Manual.

It is the best way to maintain product and service standards, promote overall uniformity and consistency in your franchise program, and make sure that your franchisees understand what is required of them.

The table of contents and number of pages in the manual are disclosed in the FDD, and it will be referenced in and become a part of the Franchise Agreement.

When we design or create a franchise opportunity, we usually work on the FDD, Franchise Agreement and Operating Manual at the same time as opposed to treating them as separate projects.

To learn more about the steps to franchise your business, take a look at the article; “If You Build it.”

Is the Franchise Disclosure Document (FDD) that important?

In a word?  Yes.

Some concepts aren’t suitable for franchising so a great offering circular isn’t going to help, but a poor or complicated FDD designed for an established franchise system can make it next to impossible to sell franchises.

New franchisors sometimes think (or are told) that all they need to do is ”get legal” to be successful selling franchises.  But nothing could be farther from the truth.  Lousy documents are one of the biggest reasons new franchisors fail.

We specialize in startups and stalled concepts, and custom-design everything including the FDD and Franchise Agreement for a startup franchise.

You can read more about the FDD in the article; “The FDD – One Size Never Fits All.”

What do you mean by “established” franchise?

An established franchise system will usually be about five-years-old and have 25-50 or more active franchisees with the majority of those successful – and willing to talk to potential franchisees thinking about joining the system.

In franchise speak, that’s called validation.  When you have a mature, proven offering with great validation that’s priced right, selling franchises is more about finding quality prospects (leads) than the sales process or how your FDD and Franchise Agreement reads.

But when you are first starting out, there isn’t a history of success.  You may have an attractive offering, priced right with a convincing formula for franchisees to make money – but it’s not proven yet.

Think back when you were starting the business you now want to expand through franchising.  Like most companies, you probably started small and then grew as you learned more.

Same thing when you are starting a franchise business.  The concept business is established, but your franchise company is brand new.  Just like when you started your existing business, you have to build the franchise company from the ground up.

That’s why startups must be designed and marketed completely different than established franchises – especially the FDD and Franchise Agreement.

You can read more about a startup friendly FDD in the article; “The FDD – One Size Never Fits All.”

Can you teach my staff how to sell franchises?

Yes.  We can show you how easy it is to stop "selling" and close more deals, how to keep from losing deals at the close, how buying a franchise is a process; not an event - and so on.

Once you adapt these methods your life will get a lot easier, you will sell more franchises, and the people who buy them will be more satisfied with their purchase.

You can learn more about our sales philosophy in the articles; “Franchise Sales – It’s a Business Deal” and “Franchise Sales Rhythm.”

If you are the owner, founder and sales department, be sure to read: "FSBO - For Sale by Owner."

Can you help me find more leads?

Yes.  We can help you with ads, ad placement, writing copy and where to get the most bang for your advertising buck.

For example, the right combination of Internet and print works very well.  We also have a pretty good handle on Internet franchise portals that will just take your money, and those that send some pretty decent leads.

If you have a limited advertising budget, we can show you where and how to start small and scale up using the money from franchise sales.

But before we help with that, we always want to make sure that you won’t be wasting money on more leads (thinking that will fix a franchise sales problem), when what you really have is a franchise structure or sales process problem.

For more on that, take a look at some of our proven sales and franchise offering philosophy in the Articles section, or Contact Me directly at 321-392-3000 Ext 1.