Below we list the five questions we get asked time and time again. The answers have to be somewhat general to help the widest number of information seekers. For answers more targeted to your situation, we are happy to offer any franchisor or prospective franchisor a no-obligation phone evaluation. These talks usually last about a half-hour - and we'll both learn something from it.
1) Do we have a marketable franchise concept?
Even good local business concepts don't always translate into sound franchising concepts. Here are a few basic rules to go by if you are just starting to consider franchising. (See FEASIBILITY Video)
- You need to have at least one company-owned operation with significant experience.
- Your business needs to be teachable.
- Your business needs unique intellectual property and trademarks.
- You need access to capital to fund the legal and structural work of bringing a franchise to market.
2) How much would it cost to bring a franchise to market?
The cost varies with the type of franchise, but - on average - you will need about $75,000 - $150,000 (including legal) if you are starting the franchise from scratch. Our fees vary by the nature and amount of work we provide. Franchise Integration can help with everything from concept evaluation to planning, legal, marketing, branding, sales and ongoing support. Since we provide only the services you want and need, the cost is always competitive and much more effective than doing it yourself.
3) How long before we're ready to sell our first franchise?
The answer to this depends on where you're starting from. If you're at ground zero, it could take three to six months or more of preparatory work (marketing plan, legal documents, trademarks, state registrations, marketing materials, messaging concepts, territorial studies, site selection profiles, ideal franchisee profile, etc.). (See DEVELOPMENT SCHEDULE)
4) How fast can we grow?
One of our jobs as advisors is to impart the unvarnished truth. The conservative answer to this question is: It depends on the type and cost of the franchise and the type of franchisee you're looking for. However…the answer from our decades of real-world experience is: "Not as fast as you envision." Franchisors too often base their business plans on "hopes and wishes" rather than the hard, cold evidence. Here's one piece of information on which to chew: It takes an average of almost 100 leads to generate one franchise sale and it takes an average of six to ten weeks to close that sale.
5) What are the main reasons new franchises fail?
The list is long but the top six items here cover the great majority of cases.
- The franchise concept is flawed
- Lack of compelling message, branding and planning
- Management are not franchise experts
- Budget is unrealistic
- Lack of professional sales programs and materials
- Unprepared for the unforeseen (Economy, Events such as 9/11, Technology changes, Death, Divorce)