When done well, franchising your business can be a great way to grow and expand your brand and to earn additional income. It also provides opportunities for franchisees to start and establish their own businesses using your proven systems and methods.
One of the decisions you will need to make during the franchising process is what to charge your franchisees. A good place to start is to research and analyse the market and your competition thoroughly, so you can determine the current level of fees. However you also need to have a closer look at your own business, its operating cost and profit margins
Franchise fees of course refers not only to the initial purchase cost, but also ongoing management fees and royalties throughout the life of the franchise.
Setting franchise fees is a bit of a delicate balancing act that takes into account the needs of both the franchisor and franchisee. If your initial fees are too high your franchise may not be attractive to potential franchisees, but if they are too low it may cause suspicion and deter those who expect to pay more for a good business opportunity.
At the Franchise Institute, we understand the complexities involved and we can provide professional franchising advice to help you get started. We advise our clients on how to start a franchise with full knowledge of the setup costs involved.
If you are considering franchising your business, one of our franchise consultant can discuss with you the best ways to set initial and ongoing fees, ensuring that all bases are covered and that profitability is built into your franchising system.
Thanks for reading,
The Franchise Institute Team
1300 855 435