Franchising Questions: FAQs
What is a Franchisor?
A franchisor is the owner of the franchise system. You will be a franchisor when we complete work on your franchise system.
What is a Franchisee?
A franchisee is a person or company that buys a franchise from a franchisor.
How much does it cost to franchise?
It varies according to the complexity of your business and how far along you are in developing your franchise system. With a quick, 30-minute or less phone or in-person consultation we can give you a solid estimate. Request a free quote today.
My business is unique; can I franchise?
That’s great if you have a unique business. Unique businesses have great upside in the market. Almost any business can be franchised and any franchise can be successful if the right system is developed. That’s why we’re here.
How long does it take to begin franchising?
Most franchise’s we develop take around five months to complete from start to finish.
What is a franchise registration state?
Currently there are 15 registration states in the United States. Some states require a separate registration for franchise companies to do business in the state. We can guide you on the states and requirements of each. View more information on franchise registration states.
What is an FDD?
Every franchise has to offer a Uniform Franchise Disclosure Document. The UFDD or FDD is the bible of the business that is being offered as a franchise. The FDD has 23 items that disclose how the business will operate under the disclosure document. We custom write each franchise agreement using an attorney that practices franchise law.
How much can I charge for a franchise fee?
Part of the process at Next Franchise Systems is for us to sit down with you and discuss your franchise fee options. Fees will depend on the type of business you operate, the amount of hands-on training and other items. Franchise fees run from the low side of $10,000 to more than $50,000.
How long is my franchise agreement good for?
Franchise agreements run from 5 to 15 years, depending on the type of business you plan to franchise. It is common for a franchise that will be anchored in a national mall to have a 20 year lease and a 20 year franchise agreement. Each case is different, and we will guide you on the right time frame for your concept.
Is franchising profitable?
Franchising is a way for the founder of a business to expand the business using capital from a new franchise owner and share in the profits over the life of the business. If you are able to scale up your brand, franchising can be very profitable.
How many franchises will I sell?
Industry surveys show that between 6 and 9 franchises are sold the first year by new franchise companies on average. Results will vary by concept and franchisor management.
How complicated is franchising?
Franchising is not complicated once you get your FDD and franchise program established. Franchising falls under securities law and it governed by the Federal Trade Commission. That is why it is important to work with an experienced franchise attorney. Once we get your franchise system setup, you will be able to operate the franchise and we will show you the steps you will need to keep your system in compliance. Hundreds of franchises come to market every year — your franchise can be NEXT.
Will NEXT Franchise Systems help with franchise sales?
Part of our program is to teach you how the sales process works, we can also be part of your first couple of sales if you need us. At that point, we can negotiate terms to continue being your franchise sales company.
How long should I be in business before I franchise?
There is no requirement that you have to be in business a certain length of time . Each business is different and we can help determine what is best for your company.
How many units should I have open before I franchise?
There is no requirement that you have to have a certain number of locations or units open before you franchise. Once again, every concept is different.
Is my business “franchisable”?
Not every business can be, or should be, franchised. The true test of any franchise is whether or not a franchise owner will be able to operate the business and make money. We can help you answer that question by looking at your business concept.