Franchise news, education & opportunities

The Franchise Courier is a news and education resource for the franchise industry. It covers how to franchise a business, franchise law and disclosure, brand launches, and growth strategy for aspiring and established franchisors.

A business is generally ready to franchise when it is consistently profitable, has documented and repeatable systems, a recognisable brand, and a concept that a trained operator can run in another market. Reviewing financials, operations manuals, and market demand is the first step.

Typical start-up costs include legal fees for the Franchise Disclosure Document and franchise agreement, operations manual development, brand and marketing assets, and state registration fees where required. Most emerging franchisors budget roughly $25,000 to $75,000 to launch.

The FDD is a legal document a franchisor must give every prospective franchisee before a sale. It has 23 items covering fees, obligations, litigation and bankruptcy history, financial statements, and the franchise agreement, and must be provided at least 14 days before signing or payment.

The franchisor owns the brand and business system and licenses it to others. The franchisee pays an initial fee and ongoing royalties for the right to operate under that brand using the franchisor’s system, training, and support.

Yes. Franchising is regulated by the U.S. Federal Trade Commission and by several states, and the FDD and franchise agreement must be prepared by a qualified franchise attorney to be compliant and enforceable.

Preparing to offer franchises usually takes three to six months to complete the legal documents, operations manual, and franchise marketing materials. Selling and opening the first franchised locations then depends on demand and your sales process.