What Good Is A Franchise If You Don’t Get Great Support?
I’m really not trying to be a wise-guy. It’s a simple question, really. And, it’s one that needs to be asked if you’re serious about becoming the owner of a franchise business.
Franchises Cost A Lot Of Money
Darn right they do.The upfront franchise fee alone will cost you around $30,000. Then there’s the equipment you’ll need to operate your business. Inventory. The cost of the build-out. A phone system. Signage. Some working capital. Travel to and from training at franchise headquarters. That’s just the money you’ll be paying upfront. Before you even open for business.
After you open your franchise business, you’ll be sending money (a royalty) in to franchise headquarters each and every month until your franchise contract (agreement) ends. The money you’ll be sending monthly will be a percentage of your sales…or maybe a flat amount.
(I just did a consultation with a gentleman-he happened to be a veteran-who was looking at a franchise that charged a flat $2,000 a month in royalties. That’s $24,000 a year being collected by the franchise company!)
One more thing: Most franchise companies insist on collecting 2–3% of your revenue for the National Marketing Fund.
Seriously: What Good Is A Franchise If You Don’t Get Fantastic Support?
Maybe a better question is this:
“Why should you pay all that money upfront-and during the term of your franchise agreement, if you don’t receive great support from headquarters?”
Fair question, right?
When your franchise business is experiencing a problem-an issue, one or two phone calls to headquarters should put you on the road to having no issue, right?
Now, in the franchise company’s defense, franchisees that expect instant support aren’t being reasonable. There are other franchisees.
So what kind of support, specifically, should you expect after you sign your franchise agreement and send in your upfront money?
I just finished writing an article on that very topic for The U.S. Small Business Administration’s blog.
Read — Franchise Support: What Does It Mean? — over at SBA.gov. Then you’ll know what to expect, support-wise from franchise headquarters.
Then, go here to check out all the articles I’ve written for the SBA over the years, so you can become a knowledgeable franchise buyer.
Speaking of becoming knowledgeable about all things franchise, check out Franchise Business University.