Franchise Development - Michael J. Childs Consulting

Franchise Development

FLAT FEE FRANCHISE DEVELOPMENT

I offer turn-key, Flat Fee Franchise Development Packages as low as $24,900 that includes everything you need to franchise your business and start selling franchises in the shortest amount of time.

Your program, legal documents, and Operations Manual will be custom designed from the ground up specifically for a startup franchise business concept.  You’ll get a program that is simple in design with documents that are easy to read and understand for you, your buyer, and franchisees.

Included in the Franchise Development Package:

Franchise Disclosure Document (FDD)

The FTC requires a Franchise Disclosure Document (FDD) for all franchisors offering franchises in the United States.  It contains 23 Items that explain the franchise that you are offering in plain English.  The FDD must include copies of everything your new franchisee will be signing such as the Franchise Agreement and other agreements.

The FDD will be written following the Franchise Trade Commission (FTC) Franchise Rule governing the offer and sale of franchises in the United States in easy to understand, plain language with careful attention given to producing a fair and saleable offering that is attractive to potential franchisees;

Franchise Agreement

The Franchise Agreement is the legal contract between you and your franchisees.  They are not required to be written in plain English or stick to a specific format like the FDD.  But legalese is hard to decipher, so you will get a Franchise Agreement in plain language, making it easy for both you and your buyers to read and understand quickly.  Easy to read documents is a huge benefit to you when it comes to selling franchises.

Custom Operations Manual

The Federal Trade Commission (FTC) Franchise Rule requires that you have an Operations Manual.  The Table of Contents and the number of pages in the manual are a required exhibit in the Franchise Disclosure Document (FDD).  Working closely with you both at your location and offsite, we provide a complete, custom Operations Manual that is professionally written, edited, and ready to use.

A complete, well-designed Operations Manual is the perfect textbook to use during initial and ongoing franchisee training.  You won’t need a separate training manual.

Unlimited Franchise & Business Consulting

The Franchise Development Package includes unlimited franchise consulting and business advice.  There are not many legal decisions you need to make about your new franchise offering, but there are hundreds of business decisions that you need to make.  Attorneys help with the legal decisions, franchise consultants such as myself, help design a saleable offering by assisting you with the business decisions.

Here are just a few examples:

Territory Size and Layout. Getting the territory size or layout wrong is one of the more significant mistakes new franchisors make.  You can’t just pick a number or use what other franchise systems are using and hope it works.  We use powerful territory design software to help you design and right-size your territories by counties, zip codes, population, and other demographics.

Initial Franchise Fee.  The initial franchise fee is also critical to your success. If you set it too high and sell a few franchises but then sales stall, you’re stuck. Set it too low, and you can kill the perception of value, although too low is always better than too high.  You can always go up.  Using the franchise fee from a mature franchise offering similar to yours is almost always a mistake.  Again, you can’t just pick a number.

Ongoing Royalty. Ongoing royalty also needs careful consideration.  Setting it too low, even though you may have to live with a few of the first franchises paying lower fees, is better than starting too high, which can prevent you from selling many franchises and may keep new franchisees from making enough profit to succeed.  Once your system begins to mature, and your early adopters are successful and validating well, you can then raise the royalty and other fees.

Other Fees. These include technology fees, brand building funds, and national advertising fees, all in addition to the royalty your franchisees will be paying.

Term and Renewal. A lot of thought also needs to be given to term and renewal.  For example, the length of the initial term, how difficult or expensive it will be for your franchisees to renew, is signing the then-current form of the franchise agreement required and any reduction or change in the territory. Even though renewal is usually ten years away, term and renewal provisions that seem unfair hurt franchise sales.

Franchisee’s Obligations. Franchisee obligations are what is required of your franchisees to stay in compliance with the Franchise Agreement, keeping in mind that you have to police every rule or requirement you put in place.  Examples include the restrictions on sources of products and services your franchisees will have to abide by, whether you will require that the franchisee personally participates in the operation of the franchised business, and the restrictions on what the franchise is allowed sell.

Franchisor's Obligations. You will also need to decide what you will be legally promising to do for your franchisees in exchange for the initial franchise fee and royalty before they open for business and ongoing obligations.  Examples include site selection, lease approval, initial and ongoing training, opening support, website and email, onsite visits, yearly conferences, maintaining a list of approved suppliers, and marketing and brand building.

The Legal Framework of Franchising

The business aspects of a franchise system intersect with the legal framework of franchising. Having developed, owned, and managed my own franchise companies as a franchisor, I have a thorough understanding of the business side as well as the legal side of franchising.

I’m available to act as a liaison between you and legal counsel and provide feedback and seasoned business advice, which helps ensure consistency across the entire franchise system, and aid in the completion of thorough, accurate legal documents.

I will also help you understand the interconnected systems in your franchise model, and make sure that the legal content in your Franchise Disclosure Document (FDD) and Franchise Agreement are in sync with your Operations Manual, day-to-day operations, franchise sales process, and your unique business system and culture.

Franchise Profit Potential

When done right, expanding your business through franchising can be very profitable. To get an idea of how much you can make by franchising your business, contact me for a no-obligation quote to franchise your business, and I’ll send you a Franchise Potential Calculator you can use to forecast franchise sales and royalty for up to ten years.


Learn More About How to Franchise Your Business

We can help you design a franchise offering and franchise system that is saleable, sustainable and profitable.  All at a very affordable price.

For a free consultation, give me a call anytime at 321.392.3000 X 1 or schedule a call and I’ll call you.