Franchising

We have been asked to sell our recipes so that friends of ours can take it to another town and open a pizza restuarant. How much would you sell something like that for? And do we need some kind of contract?
A. Hopper
ahopper4@sbcglobal.net
Help ASAP

I wouldn’t sell them the recipes. I’d manufacture it and sell them the finished product at a mark-up. And then I’d charge them a royalty on their gross sales. That’s what a franchise is.

GET AN ATTORNEY! Sounds like you might need some help in that aspect. Also, it’s not cheap. If you’re thinking about becoming a franchisor you’re looking at dropping somewhere in the neighborhood of $20k in attorney’s fees. Hope this helps. -J_r0kk

If you are thinking about franchising, then you should really take a good look at your friends and your goals. The fees and procedures you would need on place to franchise are a giant task, and a very expensive process.

You also have to think about the possibility of failure. If something goes wrong the your friends could end up suing you or worse.

Packaging your products and selling them is also a challenge because of the different laws you will need to deal with. I looked into central dough production, and the health dept wanted me to add an additional $10,000 worth of equipment, from air curtains to automatic doors. It would not have been worth it.

You might be far better off to just help out your friend with some recipe advice. Pull a few dough recipes off PMQ, teach them how to make dough, and introduce them to your supplier for sauce options.