Franchise Q and A
Updated: Nov 6, 2018
You have questions about franchises and we have the answers!
Franchise Q and A:
1. What is a franchise?
a. A franchise is a licensed business or brand. In terms of owning a franchise, it means that the original business opens itself to others paying into the network and using the name, brand and products to service a particular area. Established brands often start franchising in order to start reaching markets that would other wise be impossible to service.
2. What is a cheap franchise?
a. Here at CheapFranchise.com we characterize a cheap franchise as a franchise brand that doesn’t take more than $100K to start operating and that doesn’t need a store front location (in turn lower cost to operate).
3. What is a franchise fee?
a. The franchise fee is the initial price that the franchisor has set to become a licensed franchise member and to have the ability to use the name and services that that brand provides.
4. Do all franchises have royalties?
a. In short, yes. Brands have royalty payments in order to produce revenue for the franchisor. This money is used to drive innovation, development of new products, and offer better support to franchisees. This is usually a percentage of gross revenue.
Many brands also have a marketing royalty that goes to paying for larger and much broader marketing efforts.
5. Is the franchise owned by me or by the company?
a. The franchise is yours! It is locally owned and operated by you. You acquired the rights to use that name and the services that the specific franchise provides. However, you agreed in your franchise agreements that you would operate within a certain parameter of professionalism and representation of the brand. The franchisor still hold rights to terminate or remove your franchise if you do not follow these parameters.
6. How do you buy a franchise?
a. Your franchise buying experience can start right here on CheapFranchise.com. It's best to start browsing brands that fit in with your interests and that have a place in your local market. Next you will be able to speak to a franchise expert, start to gather more information, speak with other owners of the brand you are interested in, and finally make a decision to purchase a franchise. The process will be laid out for you and you will have a clear plan in front of you as you start the process.
7. What is a Franchise Disclosure Document?
a. A Franchise Disclosure Document, FDD for short, is the industry standard for franchises to disclose information to potential franchisees. It is a legal document that gives you insight into the brand's current standing, its locations, franchise costs and ongoing fees, financial information about the network as a whole, and many other important pieces of information about the brand.
Reach out to us at CheapFranchise.com today and start your journey to owning your own business!