Franchisor FAQ

What are the advantages of franchising my business?

The advantages to you when growing your business through franchising are easy to remember.  They are speed, people, and money.

Speed - Expanding your business through franchising is much faster than opening company locations.

People - Franchisees represent the best, long-term management there is.

Money - Franchisees use their capital to open the site, making the cost to you when opening a franchised location a fraction of what you would spend opening company locations.

Read the article; “Ready to Franchise your Business?” for more.

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

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

There will be a binding contract (the Franchise Agreement) between you and your franchisees and a playbook they must follow (the Operating Manual).  These legally enforceable rules and policies can be as strict as you want them to be, even to the point of micro-managing your franchisees.  Although that is not something I suggest you do.

Read the article; “Ready to Franchise your Business” for more.

Is a completed Operating Manual required to start selling franchises?

Yes.  An Operating Manual is a Federal Trade Commission (FTC) requirement for selling franchises in the U. S.  The table of contents and number of pages must be included in the Franchise Disclosure Document (FDD).  Operating Manuals should be at least 150 pages.  Ours are between 200 – 300 pages when completed.

The Operating Manual is included in our Franchise Development Package.

Is a Franchise Disclosure Document (FDD) that important?

Yes.  The FDD is required by the Federal Trade Commission (FTC) for all franchisors offering franchises in the U. S.  It contains 23 Items that explain the franchise that you are offering in plain English.  The FDD includes copies of everything your new franchisee will be signing such as the Franchise Agreement and other agreements.

The Franchise Agreement is the legal contract between you and your franchisees.

The FDD and Franchise Agreement are included in our Franchise Development Package.  For more about FDD design, read the article; “The FDD – One Size Never Fits All.”

Do I really need a $30,000 feasibility study?

Not unless you have a very complicated and high-fee offering planned such as a hotel.  With smaller startups, feasibility studies are usually a waste of money.

As a successful business owner, you understand your business and industry better than anyone else ever could.  Deciding whether franchising is right for you takes some thought and investigation on your part.  Just not an expensive consultant’s report.

If your're not sure, buy an hour of my time ($95) and I can help you.

Read the article; “Ready to Franchise your Business?” for more.

Will I need anything else if I use your Franchise Document Templates to franchise my business?

Yes.

No matter whose templates you use, before you start selling franchises, you will need to hire a franchise attorney that works for you, not the template company, to review your revisions to the documents and represent you as you sell franchises. Budget about $500.

If you don’t have a registered trademark, you should file a federal registration to protect your brand. It isn’t an FTC requirement. Budget about $500.

Audited financial statements are an FTC requirement in the FDD, but not the first year. You only need a simple balance sheet and consent letter from your CPA. Budget about $200.

You may want to start a new legal entity for the franchise company. It isn’t an FTC requirement. Budget about $200.

Can I sell my franchise opportunity myself?

Yes.  It’s not as hard as people think it is.  The trick is to design your franchise offering to make it easy to sell and still keep all of your legal protections, which is how we develop franchise opportunities.

Read the article; “FSBO – For Sale by Owner” for more.

What is your hourly fee?

My hourly fee is $125 but I also work on a flat-fee basis, one that you will know up front regardless the hours I work on your project.  You can also purchase blocks of consulting time at a reduced rate.

Learn more on the Franchise Development page or call me anytime to discuss your project at 321.392.3000 X 1.