In my over three decades of experience as a franchise consultant, there are a number of questions I am frequently asked.  Here are some of the most common Q&A’s:

  1. Why should I franchise my business?
  2. There are many reasons, including more rapid market penetration, combined buying power, using other people’s money and energy to expand your concept, economies of scale and others.  By far, the most compelling reason for most people is the money generated from a well-conceived and executed franchise program can be substantial.

Here is an example based on an actual National Franchise Associates’ client:

  • Average sales per unit: $1.5 million annually
  • Service fee: 6% of gross sales
  • Total average annual service fee per franchise: $90,000 per year
  • Cost of providing service to each franchise: average $5,000 to $7,500 per year
  • Annual gross profit per franchise location: $82,500 to $85,000
  • Annual gross profit per 100 franchises: $8,250,000 to $8,500,000

Even if your projected gross sales per unit are $1,000,0000 and your service fee 5%, the annual dollars generated per location to the Franchisor cam be substantial: $50,000 per year in service fees less the cost of servicing the Franchisee ($5,000 to $7,500 per location).

These figures are based solely on income from service fees. Franchisors have other sources of revenue, including Initial Franchise Fees, sales of products and services to Franchisees and possible real estate programs.  As you can see, the financial benefits of franchising can be substantial.

What is the potential return on investment for MY franchise program?

The answer, of course, depends on the amount of money you invest.  For National Franchise Associates, our average client’s total initial investment in franchising ranges from about $40,000 to about $45,000, which includes NFA’s fees, the costs of trademark filings, printing of franchise marketing brochures and perhaps some travel expenses.   They typically recoup this investment from the sale of one franchise.  All it takes to make back their investment is one initial franchise fee plus a portion of the service fees from this one franchise’s first year of operations.

Thinking About Franchising?

NFA Franchise Consultants have the experience to help businesses franchise.  Just watch and listen to some of our client case studies and video testimonials.  We can HELP YOU and it doesn’t cost anything to call and talk to us! 

So, if you are still asking the “should I franchise my business” question over and over with no clear direction, give us a call at (706) 356-5637, or contact us through our online form.  We look forward to helping you take your business to the next level and beyond.