7 June 2013
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Franchising Explosive Profits

Franchising is well known for high margins, predictable revenue, and rapid growth. new balance running homme soldes Comprar Nike Air Max Nike Flyknit Air Max Dame Nike Air Max 90 JCRD Heren As a franchisor, how do you make money and what sort of profits are to be expected?

Franchising produces revenue through two main vehicles: franchise fees and royalties. nike air max 2017 pas cher Nike Air Max Goedkoop Nike Air Max Dame Goedkoop Franchise fees are not viewed as a significant profit center but instead act as an immediate cost recovery vehicle. nike air max Baskets ASICS Femme Nike Air Max 90 Heren Nike Air Max 2014 Heren Franchise Fees offset a franchisor’s initial expenses for marketing, training, support and other costs until a franchisee’s royalty payments surpass the costs for ongoing support.

Product sales, technology sales and supplier kick backs all contribute additional revenue to your franchise, but royalties are the lifeblood of franchise system profitability. nike pas cher Fjallraven Kanken Sale Mini Nike Air Max 2014 Heren Nike Darwin Goedkoop Many franchisors experience over 50 percent profit in their royalties making it one of the most lucrative methods of expansion. Nike Air Max 1 Pas Cher The high margin in royalties comes from the minimal expense in support and training compared to the number of units paying royalties into the system.

For example, if you have 20 franchisees, you may only require a single field support person to service them. Nike Air Max 2016 Heren groen Asics Pas Cher Assuming an industry average of 6% royalties and $500,000 gross sales per franchisee, the franchisor generates $30,000 per year per unit or $600,000 per year. Nike Schoenen Goedkoop Nike Air Max 2016 Goedkoop With a minimal staff of leadership, field support, marketing, sales and accounting, much of which can be outsourced, a franchisor can keep costs to a minimum as the franchise system expands. Nike France Air Max 2015 Zwart Oranje Goedkoop Nieuwe Air Max Additionally, many of these individuals can take on more responsibilities as the franchise grows increasing profitability while continuing to limit expenses.

Are you ready for the next level?

The issue of profitability is one of the many topics of Francorp’s online “How to Franchise Your Business” seminar that is available FREE when you mention this newsletter ($195 value). Goedkoop Nike Air Max Goedkope Nike Air Max 1 Nike Air Max 90 Sneakerboots Prm Undeafted Heren To learn more about franchising, visit http://www.francorp.com or call 800-372-6244.

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