How Much Does a Franchise Cost?

Chain franchise (chain) refers to the business system in which the leading company applies its products and services (including trademarks, trade names and other corporate image, business technology, business occasions and regions) to the franchised stores in the form of business contracts. Distribution rights or business rights.

Franchise

According to the relevant regulations of the Ministry of Commerce, franchisees that carry out franchise franchise need to have two directly operated physical stores and have been operating normally for more than one year before they have a license to apply for franchise franchise.

For franchisees who choose franchise franchise projects, the training provided by the headquarters in the franchise is essential. This involves a series of support that the headquarters can provide after the franchisees join the project, which determines whether the franchisees can later Successfully run the franchise project and ensure profitability.

The more and more complete the franchise project support is, the more it can show the brand's strength, and it will also inject a strong shot for franchisees. Here is an example of support:

Management Support-Provide TMOP teaching management system and remote video conference system

Opening support-Provide a full set of VI system and decoration design guidance to unify the corporate image

Distribution support-gift of campus operation guidance CD and department operation guidance manual

Hardware support-Provide 42-inch floor-mounted hypermedia all-in-one and release system

Admissions Support-Yasibo National 400 Admissions Hotline Support

Training Support-National Principal Training Courses and Faculty Training Courses

Publicity support-publicity enrollment plan planning and specific implementation guidance

Brand support-Exclusive authorization of Yasbo brand, letter of appointment of branch principal

Honor support-branch authorization card and various honor medals

Operational support-support for the field work of the headquarters team in the branch campus

Service Support-Franchisee Conference to explore the latest education trends

Event support-large event planning marketing support and media reporting support

Outsourcing Support-Support from the Expert Lecturer Group of the Headquarters

Comprehensive

First, the trademark registration certificate

So-called

chain

The classification criteria are mainly based on the legal relationship between the ownership and the operator. The main differences are:

First, you must choose a chain system that already has considerable experience, including the length of business hours and the number of stores; if it is a brand that has not been established for a long time and has a small number of stores, because its own chain experience is not sufficient, franchisees Joining hastily, the risk is naturally high.

Second, the technical difficulty cannot be too high. Generally, the franchisees are all laymen, so the less technical industries are more suitable for joining (such as Super Business), and the higher the technical difficulty, the longer the time for teaching; usually the more technical industries, such as hairdressing, glasses, etc. Internal entrepreneurship is not suitable for joining.

Third, we must pay attention to the development trend of the chosen industry. Is the intention to grow in stability or decline? Especially in some popular industries, the business was booming when they first joined. It didn't take long before the boom passed and business plummeted.

Fourth, personal interests must be considered. Because each industry has different industry characteristics, franchisees are best to choose an industry that shares their interests, and don't just care about making money and ignore personal interests.

5. It is necessary to consider the competitiveness of the headquarters in the industry. How much support does the headquarters provide to the franchisees? Because the competition among peers will inevitably involve the strengths and weaknesses of the brand, the competitiveness of the first brand is naturally stronger, and the competitiveness of the relatively smaller brands is naturally weaker.

6. Inquire about the established franchise stores. If it is a brand with a sound franchise system, you should be happy to inform the franchisees of all store addresses and phone numbers. Franchisees can first ask the relevant shoppers for relevant information. The information obtained is often the most truthful, and franchisees can also learn about the general operating conditions in the future.

In addition to the above six points, of course, the human resources and funds of the franchisees are all factors that must be considered when joining.

1. Selling points of chain projects (core competitiveness);

2. Market potential of chain projects;

3. Investment profit space;

4. Credit background of franchisee;

5. Operation status of model shops;

6. Advertising support;

7. Controlling risks;

8. Post-operational maintenance

(1) Franchise fee: Due to the termination of the contract, the franchise fee will not be refunded, and the two parties shall have no objection. Due to the cancellation of the contract by one or both parties in advance, the return of the franchise fee, in order to avoid disputes, the two parties should clearly agree on the nature of the franchise fee and the conditions for the return. If the franchisor fulfills its obligation to collect the franchise fee, the franchise fee will not be refunded. If the franchisor constitutes a fundamental breach of contract or fraud and the termination of the contract cannot be achieved, the franchise fee shall be refunded.

(2) Royalties (often brand royalties in practice): a. Regarding charging methods, there are two types of fixed fees and proportional fees. Proportional fees are generally calculated based on the franchisee's operating income and then multiplied by a fixed proportion to obtain the fee. A fixed fee is a prescribed fee charged for a certain period, such as monthly or yearly. The risk of adopting proportional fees is that the operating income provided by the franchisee during the term of the contract is low, and the operating income is refused after the contract is terminated. If the franchisor requires an audit, the audit is difficult due to the irregular operation of the franchisee Achieve their goals. However, when the franchisor pursues the arrears of the royalties from the franchisee after the contract is terminated, it is difficult for the franchisor to provide evidence. Adopting a fixed fee or a combination of the two can protect the minimum rights of the franchisor. The royalties are the royalties collected by the franchisor during the performance of the franchise contract. The termination of the contract will stop the charges. However, according to Article 113 of the Contract Law, if the franchise contract is terminated early due to the franchisee's breach, the franchiser It will not be able to continue to obtain royalties for the remainder of the contract, which is a loss of "available benefits" to the franchisor and the franchisee should compensate.

(3) Joining deposit: the franchisee has no breach of contract or other breach of good faith during the contract period. The scope of the non-refundable margin should be set relatively wide in order to protect the interests of the franchisor. If the two parties do not have an agreement on the security deposit, the security deposit is essentially a chattel pledge. If the two parties agree that the deposit has the nature of a deposit or that the franchisor has the right to deduct the entire deposit, the deposit may be subject to a deposit penalty. If the two parties expressly agree that the deposit does not have the nature of a deposit, such an agreement is beneficial to the franchisor.

(1) The licensee benefits from the continuous research and development work done by the franchisor to improve the management and maintain the system in a fashion and strong competitiveness.

(2) The market information and various experiences collected by the franchisor can be shared by the licensee. This information and experience is not available to anyone outside the system.

(3) The division of the area protects the licensee from competition from the franchisor or other licensees in the system. If banks recognize the advantages of franchising, they may be more willing to lend to the grantee. In fact, many foreign banks have established franchise lending service departments specifically, whose role is to provide financial assistance to franchise franchisees and licensees.

(4) To improve the management ability of the licensee and the satisfaction that has not been achieved in previous work.

(5) The chance of success of the licensee is greatly increased. According to a study by the U.S. Department of Commerce, the success rate of franchising is much greater than that of non-franchising: during the 3-year review period, about 80% of new companies failed, and many It even existed for less than a year. In comparison, less than 2% of new franchise companies have not been able to continue in the three-year period.