So you are looking for prospective franchisees to grow your network. However, many of them quit the game as soon as they land on the Investment square… and you’re back to square one.
The more expensive your franchise concept is, the more limited your pool of prospects would be. Of course, with higher required investments you can anticipate higher return on investment (ROI) of your operators (or investors).
Whatever your upfront franchise fees and costs are, they must be first and foremost consistent with the value of your brand. So, roll the dice… You land on the Determine Your Brand Value square.
Are you relatively new to the franchise industry and not sure how to determine the value of your banner? Although there is no miracle formula for it, there are several factors to take into consideration such as your brand awareness, the effectiveness of your management processes, the services you offer, the quality of your network of suppliers, and the potential profitability versus the investment in capital and time.
You should also assume that with greater investment requirements on your part come higher expectations on the part of prospective franchisees in terms of ROI, available services and support offered to them…
Usually, investors/operators with a higher investment capacity are also seasoned entrepreneurs who have a few games under their belt. Their questions will be more pertinent, their expectations will be more specific. You would need to provide good answers to meet their requests if you want to add a new property.
Then, if you decide to change your strategy in order to build a monopoly by making your concept more accessible, you may:
- Offer internal financing (provided you have sufficient resources);
- Become a franchise co-owner (split the investments needed with the franchisee);
- Make specific agreements with financial institutions;
- Support franchisees in their efforts to obtain financing;
- Offer ‘express’ or ‘mini’ franchise concepts adapted to smaller units and limited budgets.
It’s your turn now! Move directly to the FlagFranchise square and set up your profile! It improves your chances to collect properties and build your network.