Skip to content Skip to footer

At What Stage of Franchising May Franchise Consultancy be Necessary?

A question we get asked from time to time is at what stage of franchising may franchise consultancy be necessary? It’s a very relevant question because, for some, the advice they really needed comes too late. Franchising a business can be years in the planning or weeks in the execution. Knowing what to do and when is the best time to take on franchise advice is an unknown to most. However, Lime Licensing Group provides consultations completely free of charge. So if you’re thinking of franchising then call us and we’ll be happy to help you without cost.

When is too early

We would usually advocate that the time franchise consultancy is necessary is as soon as the core business is making consistent profits. This is because when you launch a franchise there are additional costs that each franchisee will pay for that you aren’t currently experiencing. For example, all franchisees pay a royalty. The industry average is about 10% of turnover. Franchisees also pay a marketing levy in addition to their own marketing costs. Head Office orchestrates the marketing levy which is often around 1.5% of turnover. So if your fledgeling business is making a loss, or is at breakeven, a franchisee will lose money all things being equal. In some franchise systems, royalties can be above 25% and in others as low as 4% so you need to hire someone to provide some franchise consultancy early on. That way you know when you can consider franchising your brand.

When is too late?

There’s really no need to even ask us at what stage of franchising may franchise consultancy be necessary. This is because we provide free franchise consultancy so there’s no need to leave it too late! Too late would almost certainly be after you have committed any funds at all towards franchising your business. Too late would also be when you’ve found yourself making any franchise decisions. We have met brand owners who have taken franchisees on and then realised that they have made a material error. However, once an agreement is signed you can kick yourself for the duration of the franchise agreement. As a result that could be a 10-year error! Just call us to discuss your situation and we can advise you even if you’re planning years ahead.

When is the perfect time?

Perfection exists and it is characterised by a few key elements. Firstly, a business that is already successful is everything in franchising. Added to that if the business would benefit from having regional branches then franchising becomes a compelling option. For example, let’s say you’re a business consultant and you have a strong local presence in Birmingham. If you were to move house to Southampton would you be able to replicate your business down there? If the answer is yes then you have a replicatable business. In franchising the ability to replicate the original location matters greatly. If you feel you are already at that moment then it’s time to discuss franchising your business…. don’t leave it too late!

Find your nearest franchise consultant here or call us on 01274 662001.

Leave a comment

Go to Top