Viewed started this topic @ 13:33 on 16/12/2009
Without going into to much detail, I was wondering if you could give me an idea on what YOU would consider to be a fair price to purchase a franchise of a company based on the following info
The reason for this question is that we are interested in what you think would be fair
Your estimated turnover would be £75K in the first year
Your turnover is estimated to be 100K + in year 2
Clear profit would be 70% of turnover
All equipment, training, support etc is included in the franchise package and no experience in this field is needed as the training covers everything you would need to know, you would only need inteligence and aptitude to learn and the willingness to work
Your own exclusive area, with room for growth
National and local advertising included (no extra levy)
Professional support
Cash flow positive with all payments immediate on completion of the job
So what would you think that this franchise would be worth to YOU to purchase if YOU were looking ?
This is not pie in the sky income and definately not boring, we will be launching our franchise network in the new year, the figures quoted are achievable with what I call normal levels of work,
YOU can help me with your ideas on what is good value
I am not interested in what other franchises with similar earnings cost, I am interested in what you consider fair
RE: How much to pay for a franchise ? Your comments needed
E17Tony | 24/02/2010 02:56 PM
Not sure how to square 'not pie in the sky' with an as yet unproven franchise opportunity. My suggestion would be to to look at other proven franchises with these kinds of turnover, pitch in with a 'fair' starting price, get some proven track record of success under you belt and then increase the fees accordingly.
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RE: How much to pay for a franchise ? Your comments needed
Techdude | 04/03/2010 11:52 AM
I think the price you pay for a franchise needs to be relatative to what the franchisor is offering for the money being asked. The main point to make is that the predicted turnover is just that "predicted", it doesn't guarantee that you will make that money. I think it is very important to explore the market to see what types of franchises are available, and whether you will enjoy doing the work. There are many websites that will allow you to explore different franchising options but i would recommend this one
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RE: How much to pay for a franchise ? Your comments needed
Nextdayprint | 03/04/2010 11:38 AM
Franchise fees on untested franchises are kind of scary... I'd recommend reading a book by "Paul Orfalea", called "Copy This!" He is the original founder of Kinkos (the largest chain of copy shops in the world) and there is some interesting stuff about how his early franchises worked... mainly they were bought by friends, relatives, and employees of his existing stores. Only later did the big money start.
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RE: How much to pay for a franchise ? Your comments needed
aladamapee | 21/05/2010 04:22 PM
Franchise pay is depending the company product and services' goodwill. If the goodwill is excellent, then you may pay some around a ratio of 45% to total earning.
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RE: How much to pay for a franchise ? Your comments needed
sanoy | 20/07/2010 03:36 PM
Although it is really tough to guess about the fair pricing with this limited information but I will give you a rough idea. Suppose if i will run this franchising network with this earning per year (supposing high good will and selling record) then I will demand £50K as franchising fees.
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RE: How much to pay for a franchise ? Your comments needed
howtofranchiseguide | 26/08/2010 10:54 AM
I think, it depends on which franchise niche area, you are entering. It also depends what rights are given to you. If you are going to get limited rights only that you should not pay more but if there are no limitations and giving you full rights than there is nothing bad and worth paying more.
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RE: How much to pay for a franchise ? Your comments needed
sanoy | 07/09/2010 05:37 PM
£75K in the first year is ok but In order to pay the business or franchise.
Think very carefully before and Do research
See if it is © do investigation.
In the end pay it legally do all the paper work
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RE: How much to pay for a franchise ? Your comments needed
Det | 19/10/2010 02:11 PM
I would base my decision on three things
1. Is the company providing the franchise going to earn more money from selling the franchise than they do from selling their product/service.
(I don't want to pay any amount of money to a company that is selling franchises as their main income stream. This gives them no incentive to work hard towards my success.)
2. What makes the franchise necessary? Meaning could I do this on my own and if not, why not?
(I'd need to know what special skills or equipment the franchisor brings to the party)
3. Is the success of the franchisor directly related to the success of the franchisee.
(In my opinion there should be a symbiotic relationship between the franchisor and franchisee. The franchisor should have a vested interest in the franchisees success AFTER the franchisee has parted with their money.)
As for how much a franchise is actually worth, this is a difficult question. I am personally discovering this by offering pilot franchises for a nominal fee. Once we can quantify the success of several franchisees, we will have a measure to value the franchise by. Don't forget, one franchisee may blaze a trail but that doesn't mean that they all will. Having been a salesman for many years, the one thing that is obvious is success is relative to the person driving the vehicle and so indications of possible earnings are relative to the work put in by the franchisee.
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