FRANCHSING: WHAT DOES IT COST?

What does it cost to franchise?

Not a week goes by that I don’t get a call from a successful business owner wanting to explore “franchising” their business. Typically, during this introductory call (for which there is no charge), the subject comes to a request for a ballpark figure of the costs to franchise. Obviously, that’s a difficult question to answer, when there is a myriad of issues and concerns to be addressed. Here are just a few of the items that I bring to the caller’s attention which are likely to cost money.

Business Plan

Do you have a strategy that is suited to expanding your business? A business plan based on a careful financial analysis of current operations, indicating that your business can be replicated (taught to others), and a well thought out plan for a franchise structure for your business (not the operation to be franchised), that will work as you have envisioned.

Demographics, Customer Bases, Locations, Business Partner Profiles

What are the factors that have made you a success? Before jumping into the franchise world, you need to really understand what has made you successful. Have you defined the demographics, both in terms of your customers and the potential franchisees (business partners) that can perform at the success level needed to replicate the business you have created?

Operating Manuals

Have you started to write manuals describing how your business functions on a day-to-day basis? Are they clear and easy to understand? Do you have business operations and policies written down so that they can be easily followed? If not, you will need to develop them. Your operating manuals are an essential tool the franchisee needs to execute the business in a profitable manner.

Experts

Aside from having a good manual writer (you will likely need an expert in the field to assist you), you need a CPA to prepare initial, and possibly audited, financial statements, and an experienced attorney well versed in franchise law (let’s think Godfrey Legal) to draft the franchise agreement and related documents, including the Franchise Disclosure Document.

Costs?

We’re just now getting there! None of the above comes for free. You can buy a Mercedes or a Hyundai. Think of these variables, add about 50%, and you are in the ballpark. Want some of my guesstimates? Please call me at 407-701-7530 for a free telephone interview.

B.F. "Biff" Godfrey, Esq.
B.F. GODFREY, P.A.
D/B/A GODFREY LEGAL
2601 Technology Dr.
Orlando, FL 32804
(407) 701-7530 (off)
(407) 578-2347 (fax)
biff@godfreylegal.com
www.godfreylegal.com