Continue to Site

20,000bucks to franchise...

  • Thread starter Thread starter system
  • Start date Start date
S

system

Guest
is 20,000 dollars enough to use our name and logo and the use of our pizza sauce and pizza crust,but they won’t have the ingredients recipe of the pizza sauce and the crust,which we will manufacture in our store and ship it to them.there will be no royalties involved.
 
When I was looking into opening there were several franchises that I looked at that wanted $25000 to use the name for a 5 year term as well as a 6 to 10% royalty on gross sales.

I would say IMHO that is not enough if it is a one time thing and they have the right to you name as long as they are open.

Also look at what control you will have over the price structure and the product quality. After all it is you name on the line.
 
Last edited:
Some thoughts. Be careful what you start and how you set it up. If you have something that has “legs” and could grow at all you want to make sure you have it set up correctly. What can the purchaser of the rights to your name and recipes do with that name and recipes? If they get a blackeye it is going to stain you.
The $20,000 is nice but will soon be forgotten. Down the road the money is spent and its like you never received it in the first place.
What happens if the operator begins to do very well and decides they do not want your name? What if they come up with their own recipes? What if they figure out what your recipes are or have them analyzed? Many people would just bail out on you.
If you think about some type of continuing royalty then its franchising time or maybe a license. Franchising then requires ongoing support and other obligations by you. Licensing is often a very weak relationship and might allow an operator to also bail out on you. But, you might be able to minimize the damage if that happens by having an agreement that includes a non-compete agreement.
There are more scenarios than this to think about but the basic suggestion is to think this through very carefully and probably get some expert advice from someone experienced in this area. What you ignore or neglect now could possibly haunt you forever.
 
before you even think about “franchising”, get the low down on the law in your state, if you are not legal to franchise, there are steep fines, there could be fines even for aproaching someone about it, never make any earning claims. get a consultant firm that specializes in franchising
 
You must log in or register to reply here.
Back
Top