20 Questions & Answers about
Franchising your Business

 

Q1: WHAT MAKES FRANCHISING SO POPULAR?
A: It works! 90% of all franchised businesses succeed, while 90% of all independent businesses fail within the first 5 years of opening--a truly amazing statistic! People invest in franchises to be in business "for themselves, not by themselves." Franchising combines the experience and techniques of a successful business with the energy, finances and enthusiasm of an independent business owner.

Q2: HOW DO I KNOW IF MY BUSINESS WOULD QUALIFY TO BE A FRANCHISE?
A: If your present business is successful, profitable and teachable to others, you may have the basis to consider franchising. However, an in-depth study of your particular business is necessary to determine its suitability for franchising. An excellent way to answer this question is to have a Franchise Specialist, such as FRANCHISE SPECIALISTS, INC., perform an on-site Franchise Qualification Analysis.

Q3: WHY WOULD SOMEONE WANT TO BUY ONE OF MY FRANCHISES? I'M NOT SURE MY BUSINESS IS UNIQUE ENOUGH?
A: If your business has distinctive features that fill a certain need or "niche" in the marketplace, it may be right for franchising. Think about McDonald's. They didn't invent the hamburger. Rather, they offered a limited menu, fast service and low, affordable prices. These were their distinctive, or "niche" features. And, as they say, "The rest is history!"

Q4: HOW AM I GOING TO CONVINCE SOMEONE THAT THEY CAN LEARN MY BUSINESS?
A: A prospective franchisee is often concerned about investing their money and future in a business that is unfamiliar to them. A complete, concise, well-written Operations Manual illustrating and documenting the operation of your business is essential to put the prospective franchisee's mind at ease.

Q5: I'VE HEARD IT CAN COST BETWEEN $100,000 AND $200,000 TO IMPLEMENT A FRANCHISE PROGRAM! IS THIS TRUE?
A: We've heard those figures also. Frankly, we see no reason to pay that kind of money. To franchise successfully, we do agree that a complete Franchise Development Program is necessary and should not be shortcut by eliminating critical parts, such as Operations Manuals, custom Disclosure Statements, etc. However, a fair price to provide such a program is a lot less than $100,000-$200,000.

Q6: HOW MUCH DOES FRANCHISE SPECIALISTS INC. CHARGE FOR A COMPLETE FRANCHISE DEVELOPMENT PROGRAM?
A: Call us. FRANCHISE SPECIALISTS, INC. consists of a group of efficient specialists who maintain a low overhead operation while delivering a quality product, on time, at an affordable price.

Q7: ARE THERE ANY ADDITIONAL COSTS?
A: Yes. A certain amount should be budgeted for printing, public relations and media advertising to sell the initial Franchises.

Q8: I'VE SEEN SOME ADVERTISEMENTS THAT PROMISE TO FRANCHISE A BUSINESS FOR AS LITTLE AS $1,900. HOW IS THIS POSSIBLE?
A: It isn't possible to provide a complete Franchise Development Program for this kind of money. You'll get bits and pieces done mostly over the telephone and through the mail. For example, this "lowball" figure usually provides only one Federal Trade Commission Disclosure Statement. However, no one Disclosure Statement is acceptable in all states. The basic Document must be revised, often several times, to comply with each state's requirements. A successful Franchise Program requires "Putting All the Pieces Together" in the proper way. BEWARE of shortcuts and patchwork programs.

Q9: BUT WHAT IF I JUST WANT THE LEGAL WORK DONE?
A: OK, but be aware that the legal work consists of both a Disclosure Document and a Franchise and Trademark Agreement. Both of these are necessary before a single Franchise can be sold within the continental United States. Also, many states require that the legal documents be consistent with, and refer to, the Operations Manual and Marketing materials. The legal documentation, prepared without coordinating all the program items, will require extensive revisions before you can register and sell in many states.Franchising is a highly complex process that should not be taken lightly. Failure to abide by Federal and State Regulations can result in fines of up to $10,000 per day and, in some cases, prison terms!

Q10: WHY SHOULD I HIRE A FRANCHISE CONSULTING FIRM?
A: Your franchise development process will be quicker, more accurate, more consistent and less expensive than if you hire individuals to complete the various pieces. Remember, you're only going to franchise this business once... do it right!

Q11: HOW LONG DOES IT TAKE TO COMPLETE THE ENTIRE FRANCHISE DEVELOPMENT PROGRAM?
A: Four to six months, from the start to when you're ready to sell franchises. The program can be accelerated if the client so chooses.

Q12: WHO WILL SELL MY FRANCHISE?
A: That's a real good question. FRANCHISE SPECIALISTS,INC. is a full service franchise company that will also help you sell your franchises on a commission basis. This means only after you get a check do we get paid. We only sell franchises for those companies we have as development clients.

Q13: OTHER FRANCHISE DEVELOPMENT COMPANIES HAVE TOLD ME THEY WILL SELL MY FRANCHISES. WHAT'S THE DIFFERENCE? A: Be careful of vague generalities which do not mean they will actually do the selling, such as:

"We will show you how to train your sales people."
"We develop a saleable package."
"We provide marketing experience."
"We can build an effective sales program for you."
"We can assist in sales," etc.,etc.,etc.

As a potential franchisor, we suggest that you get very specific answers regarding Franchise sales.

Q14: REALISTICALLY, HOW MANY FRANCHISES CAN I EXPECT TO SELL IN THE FIRST YEAR, SECOND YEAR, AND SO ON?
A: The actual number of franchise sales can very substantially depending on a particular industry and a particular business. We prefer not to speculate or use "averages" without detailed information about your business. Using this information, we will provide realistic projected franchise sales and profits.

Q15: CAN I FRANCHISE IF I HAVE ONLY ONE LOCATION?
A: Sure, a lot of businesses have. In fact, the greatest percentage of franchises started with only one location (McDonald's, for example).

Q16: HOW LONG DO I HAVE TO BE IN BUSINESS BEFORE I CAN FRANCHISE?
A: There's no real rule on this. If your business is profitable, in a growing industry, and you can teach it to others, the length of time you have been in business is relatively unimportant.

Q17: WILL FRANCHISING CONTINUE TO BE POPULAR?
A: Franchising has been steadily increasing in popularity since it began with the Single Sewing Machine Company in 1850! The U.S. Department of Commerce predicts: "Franchising will be the leading method of doing business in the 2000's."

Q18: WHAT HAPPENS TO FRANCHISING IN A DOWN ECONOMY?
A: Overall, the sale of Franchises actually increases! There are more middle-management people (with financial resources) who, during such times, are experiencing either uncertainty about their jobs or are actually unemployed. They are interested in purchasing good franchises as a means of controlling their own future.

Q19: WILL I BE SUCCESSFUL AS A franchisor?
A: That depends mostly on you. If you start with a quality Franchise Development Program, thoroughly train and support your franchisees, and continue to manage your business, well, franchising can be extremely profitable, satisfying and fun!

Q20: WHAT'S THE NEXT STEP?
A: If you would like to know more about franchising your business or want more detailed information concerning any of FRANCHISE SPECIALISTS, INC.'s many franchise programs, the next step is to fill out our questionnaire.

Yes! I want to take the next step!