Sunday, September 25, 2005

How does a franchise work?

I received some of the information I ordered from the franchise companies today and greedily sat there and read the brochures in depth. On the whole, I have to say I’m disappointed that they didn’t give me the answers I was looking for. I expected them to tell me how the franchise would work for their company to give me some idea of how to structure mine.

From what I understand from reading franchise magazine and my E-myth bible, the franchisee pays the franchisor a sum of money upfront to gain access to the DNA of the company (how it operates and markets itself) and then allows them to trade using the company’s name. There would then be an ongoing amount that the franchisee would pay to the franchisor for various things. This could be training and mentoring, for supplies or services that the franchisor provides or for products that the franchisor makes.

For instance, in the Apollo Blinds franchise, the franchisee would get the client, measure up and get their requirements and then sent the work to the franchisor, who would make the blinds and then return them to the franchisee for fitting. The franchisee would pay the franchisor for making the blinds on behalf of their client.

But none of the brochures tell me how it works for their company, so although I’m going on my understanding for the way I think it works, I’ve got no proof of this at the moment. Very frustrating. I need to find someone who has started a franchise and ask them how it works or speak to a franchisee who’s willing to share the secrets of the trade with me.

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