Franchise/Liscence Fees

[TommyTwoTone]

Is there anybody on here who is franchising and or liscencing a corporate name???

If so how much are you paying a month…

I heard that a typical liscence fee is $500 a month… is this correct?

Thanks for the input.

 

[Daddio]

When I was looking into the whole franchise thing what I found to be typical was a $25k five year license fee and anywhere from 5% to 15% of your gross monthly sales. Each one had their own little quirks. For example one agreement that I read would take their royalties for anything sold in the store even if it were Girl Scout Cookies for fundraising.

 

[Charles]

I read that Fox’s Pizza Den was $10,000 and $300 a month. They all vary. Talk to the owners and find out their beliefs and attitudes.

 

[bodegahwy]

If you want to do a franchise, go with one of the big ones that offer name recognition and therefor “pre-sold” customers. They should also be offsetting some of those fees with savings on the food buy. I have never understood why people go with little franchise deals and then wonder what they are getting for all that money.

Hey, you can francise my name and recipes and policies and practices for 10K flat fee one time in any state other than Colorado! Good deal for me! I’ll even answer your emails.

 

[TommyTwoTone]

I am not so much trying to be part of a franchise… all though thanks for the offer I purchased my pizzaria from a local guy who owns several other units… we do not use there dough recipe, cheese, sauce, distributors… however I pay a substantial amount of money each month for the name and am just trying to figure out waht is fair… so any imput into how much people pay for liscenses would be greatly apreciated.

 

[Daddio]

TommyTwoTone:

I am not so much trying to be part of a franchise… all though thanks for the offer I purchased my pizzaria from a local guy who owns several other units… we do not use there dough recipe, cheese, sauce, distributors… however I pay a substantial amount of money each month for the name and am just trying to figure out waht is fair… so any imput into how much people pay for liscenses would be greatly apreciated.

OK I am confused! You have developed your own product, so it is not the same as the other units. So, why would you use the same name and pay for it? Would you not be farther ahead developing you own brand?

 

[NicksPizza]

Daddio:

OK I am confused! You have developed your own product, so it is not the same as the other units. So, why would you use the same name and pay for it? Would you not be farther ahead developing you own brand?

I think I can see where someone would, for example, like to pay me to use my name and branding in a nearby county. I have visibility, a recognizable brand image, and product reputation. A new start-up would not have to create a brand new customer relationship from ground up, has marketing materials they can use, example they can point to of a marginally successful business. I just don’t know what I would charge someone for that.

I see Daddio’s point clearly. We are kindred spirits that we want to start an identity we can control and explore (or even foul up) all on our own without having to siphon off resources to someone else. The customers I meet and develop, the sales I generate, the sweat I put in I want to be for me and mine.

Especially without the assistance of purchasing discounts, regional or national marketing, and some product development and consistency . . . seems paying someone wold be less than efficient use of your very limited (it’s always too little) monthly cash flow.