What do you get for your money when buying a franchise?Each franchise has a different investment level, and in turn each franchise offers a different package to new franchisees. I’ve seen a variety of offerings, from those networks who provide the bare minimum to get a business started, through to those who attempt to include every single cost that the business may incur in the first year.
As a general rule, I’d expect that a franchisee should receive at least the following:
Licence to use the brand and systems – this is the fundamental ‘package’ that the franchisee is buying from the franchisor
Operations manual – any franchise network that has been set up properly would have an operations manual for the franchisee to refer to. This will include the practical day to day routines that the franchisee should follow, and is the ‘blueprint’ referred to above.
Access to operating systems – most franchise networks now have computerised systems to help their franchisees automate part of their business, such as CRM systems, and any new franchisee to the network should receive access to these systems as part of their investment
Marketing material – at the very least, the franchisor should provide logos and template marketing material for any new franchisee to assist them with their launch
Access to preferred and nominated suppliers – most franchise networks will have a list of preferred suppliers, who will provide products and services at a negotiated rate to franchisees.
It’s important that you weigh up the package carefully, to ensure that you understand what you get for your money.
The above is an extract from The Franchising Handbook, which is due for release later this year. Follow this link to pre-order and be one of the first to read it!