| If you decide to franchise your business, how will it impact your profitability?
When you begin selling franchises, your income with rise significantly as: - Franchisees pay you a one time Initial Franchise Fee - anywhere from $12kto $35k.
- Franchisees pay you approximately 4% to 8% as of Sales as Royalty, for TEN years.
- Increased purchasing power lowers inventory and equipment costs.
- Greater name recognition yields lower advertising costs and higher average sales.
Let's take a look at an example of how you can DOUBLE YOUR PROFITS! In this scenario, your current business generates $500,000 in gross sales per year. Your net profit, assuming 15%, is $75,000. If you were to sell 3 franchises, with an Initial Franchise Fee of $20,000 each, sales would be $60,000. If each of the 3 franchisees generated $500,000 a year in Sales, Royalty Income would be $75,000 annually. This Residual Income goes on for the life of each franchise - usually 10 years + renewal option
• Looking at these numbers, is it any wonder there are more than
60,000 franchised businesses in the U.S. today?
• Did you know that 40% of the retail market is franchise operated? |
