Q: In simple terms, can you tell me what makes a business franchisable?
A: A concept that can be trained and duplicated and a proven business model.
Q: How do you define what a franchise is?
A: The Federal Trade Commission has made answering this question very simple. If you answer yes to the following three questions, then you are franchising.
- Do you allow your franchisees to use a common trade name (i.e. Dairy Queen)?
- Do you provide any sort of support, training, assistance, or any sort of operational control regardless of what you call it?
- Do you charge a fee of over $500 in the first 6 months of operation? (In most cases it does not matter what you call the fee such as franchise fee, training fee, orientation fee, process fee, equipment fee, etc.)
If you answered yes to those 3 questions, then more than likely, you are indeed a franchise regardless of what you call it.
Q: What are the risks if I sell a franchise without completing the required documentation?
A: Not good, and the penalties and fines can be sizable. Unlicensed franchises are monitored by the FTC and state agencies. If you unknowingly sold a franchise without proper disclosure, then the best rule is to “right the ship” sooner than later. Call us and we can help you get on the right track.
Q: Do I need to be profitable to be able to franchise my business?
A: Technically, no. However, it is important to understand that most people who are buying a franchise come with some expectation to make money. Of course, there are some exceptions where people simply are buying a lifestyle and that does happen. But for the most part, having a profitable and existing business is an important element to the success of your franchise.
Q: Does my concept need to have a Federal Trademark?
A: Your concept does not need to be registered to begin the franchise creation project. However, you will have to file for registration of your brand. Your Franchise Disclosure Document (FDD) will notate that your trademark application has been filed for registration.
As a franchisor you are granting the franchisee the right to operate their business using your trade name. Therefore, it is important your brand name/s be registered for trademark protection. The process usually takes one year for your trademark application to be fully approved.
Q: What if I just have an idea for a business? Can you still help?
A: Yes. If you simply have an idea for a business, BrandChise® is uniquely qualified to be able to help you create your prototype and test your concept. Then, once it is clear the concept is properly suited for franchising, we can move ahead with the franchise growth plan.
Q: What makes BrandChise® different than other consulting firms?
A: First, we are NOT a “Franchise Mill”! In other words, it is not our goal to simply create documents that allow people to franchise their business and then move on to the next. We pride ourselves in providing forensic, one-on-one, franchise consulting. BrandChise® is selective in who we work with. We seek long term relationships with clients who value integrity and performance. Our team comprises some of the very best minds in franchising and you can be certain that your customized project will enjoy the level of attention few firms can offer. NO CANNED TEMPLATES or FRANCHISING IN A BOX here at BrandChise®! Anyone who thinks franchising is a simple checkbox list of documents is only proving their lack of experience in successful franchising. Franchising may seem simple, but franchising is arguably one of the most unique methods of business expansion ever. That said, we highly recommend you align yourself with people who have experience at every level of franchising. At BrandChise®, our leadership and our recommendations are based on real world experience that spans every level of franchising.
Q: Why grow through Franchising?
A: There are many reasons to franchise. For starters, according to the International Franchise Association, franchising accounts for over two TRILLION dollars in annual global economic impact. Few industries measure their impact in the trillions! Next, as a business person you probably have employees. Consider growing your company and the sheer number of employees it will take to grow your business to 5 units…10 units…100 units or more. Don’t forget that all of those employees tend to come with one thing in common, an “Employee Mindset”. When you choose franchising to grow your business, you will be working with independent business owners, each of whom are under contract with you. But not as “employees”. Rather, as business owners. Each of whom have their own dreams of success. In our experience, working with numerous people with a business owner mentality is far different than working with numerous employees. Next, is speed of growth and capital. Consider the cost of building 100 locations of your current business. In fact, in many cases, the cost of franchising your business properly is often less expensive than building just one additional location. Smart franchising creates a solid foundation for exponential growth. And the list goes on….