When it comes to franchising your business, pretty much all franchise consultants, lawyers, accountants and others involved in the franchise support industry will tell you the same thing - it’s complicated. Of course they would say that – they make their living from helping intending franchisors to set up their franchises. How else could lawyers justify charging $10,000-plus to write a franchise agreement that’s substantially the same as every other one they’ve written? 

Of course, there are factors which partially justify the high price. Knowledge is one factor. You’re paying for the lawyer’s training and experience. As Picasso said when a woman whom he’d just sketched questioned his 5000-franc price, saying it had only taken a few seconds: “Madame, it took me my entire life.” Liability is another factor. You’re paying for protection from potential loopholes in the agreement and also “insurance” in case the lawyer is ever held liable for any errors. And of course you’re also paying for the lawyer’s expensive offices, team and Mercedes.

So one New Zealand franchise consultant has been quoted as saying, in reference to franchise set-up.

He’s right, but should it be as expensive as it is? And is the cost putting business people off franchising, when they may have an excellent franchise business model and be well suited to being franchisors? Especially when you consider that franchising is supposed to be a lower-cost, lower-risk way for small businesses to expand? Would all that money be better spent on setting up an effective franchise support team and better systems to increase franchisees’ chances of success?  

As with most professional services, franchise professionals tend to charge a fairly hefty premium for “mystique”, which is defined as “an air of secrecy surrounding a particular activity or subject that makes it impressive or baffling to those without specialised knowledge”. They tend to underplay the fact that franchising’s appeal is not so much from being a “business in a box” but offering the benefits of a proven business model, a recognised brand, training and support, group buying power and being part of a franchise community. These are benefits which cannot be bought online, unlike a “business in a box”.

This is another quote from the same franchise consultant quoted above, and is used by most consultants to justify their high fees. But how much time do you need to understand the fast food, maintenance or personal care businesses, the sectors which make up nearly 50% of all franchises? Especially if you’re an experienced consultant who has worked with these business types before? Most franchises, after all, are based on reasonably simple business models and derive their competitive advantage from the other benefits listed above as well as the scale they are able to achieve through franchising. 

That is, they could set up their own franchise system by themselves from scratch - if they had the time and confidence to do so. In fact, one of my clients did just that. Her research on franchise agreements must have taken months of research. But she had the courtesy to present the fruits of her research as a “brief”, rather than a fait accompli. With the help of Google, she had educated herself and only needed an experienced hand for guidance in finalising the agreement. Of course, she could have asked me to prepare the whole agreement, but in the doing all that research, she learned an incredible amount about franchising. Some franchise professionals would have refused to work with her, but I found her commitment refreshing.  

In my view, the role of franchise professionals should be to use their expertise to save their clients as much time and money as possible. That’s why I have developed a simpler and therefore less expensive process for franchising your business. 

Not all businesses are, and in some cases, another form of expansion may be preferable. Just because I’m a franchise consultant doesn’t mean I only push the franchising barrow. The fastest way to discover if your business is suitable for franchising is to take my quick online Franchise Feasibility Test here. I’ll analyse your answers and email you a no-obligation Initial Franchise Feasibility Report with my compliments.

If your results are positive, I recommend working with a consultant to undertake a more comprehensive feasibility assessment. I offer a free Initial Consultation so that we can get to know each other and I can gain a better understanding of your business and your vision for the future. I then offer a full Franchise Feasibility and Strategy Report designed to provide everything you need to set up your franchise, including how much to charge, what royalties and marketing fees are appropriate, how your franchise could be structured and how much you are likely to make from the business. The purpose of the Report is to help you build a franchise model that is viable, scalable, profitable, and sustainable for both you and your franchisees. The Report will provide you with clear direction and a platform from which you can develop your franchise system, minimising potential problems and risks in the future and ultimately saving you money. 

The Report will help you make important decisions about how your franchise business will operate and, just as importantly, your role and the role of others in the business. Do you have what it takes to lead a franchise and, if so, who will manage your existing business? What franchise fee and royalty percentage will you set? Will you require franchisees to buy products and equipment from you or approved suppliers? What’s the ideal size of your franchise territories and will they be exclusive? What’s the ideal franchisee profile and how will you attract these people? What training and support will you provide to them? Because a franchise is a long-term commitment and the term of your franchise agreement will be five years or more, you must make all of these decisions before you start franchising – but that’s where the experience of a franchise consultant can provide you with invaluable guidance.

The structure will depend on your franchise model and the legal requirements of the environment you intend to franchise in. In many countries, you will be required to register your franchise and comply with relevant franchise laws. In others, such as New Zealand and Britain where there are no specific franchise laws, you may only need a franchise agreement and operations manuals, unless you’re a member of those countries’ franchise associations, in which case you’ll be required to comply with their Codes of Conduct. Here again, I can tell you exactly what you’ll need and don’t need and in setting up your franchise, I can save you time and money in these ways:

The most common question I get once I’ve helped my clients to set up their franchise is: “OK, now how do I get my first franchisee on board?” Many franchise consultants opt out at this point. They’re not in the business of helping their clients to sell actual franchises. I am. I can help my clients to build their franchise recruitment websites, create their franchisee marketing strategies and even help you to sell franchises. Beyond that, I offer scientific techniques for selecting the ‘right’ franchisees and can work with you to provide training and support for new franchisees, once again saving you money by providing services that mean you don’t have to go to the expense of hiring full-time employees in the early stages of franchising. Even years after I’ve given franchises a ‘leg-up’, I’m still in demand to provide specific services such as preparing entries for franchise awards, as in the case of Signature Homes whose entries in the 2016 New Zealand Franchise Awards were successful in winning all the awards they entered and ultimately, the Supreme Franchise Award.