Five-minute money masterclass: how to price your franchise

Following the decision to franchise your business, one of the first things to set in stone is how much you are going to charge the people who have thrown their hat in the ring as potential franchisees

Needless to say, there are a number of factors to consider when it comes to pricing your franchise, and these will vary depending on the nature of one’s enterprise. However, there are some simple steps that can be taken to make the process of price-setting all the more straightforward, and ensure that both parties are left satisfied, at least from a financial perspective

the British Franchise Association (bfa). “And a franchisor should be able to say ‘£5,000 of that is us recouping advertising costs, there is £5,000 attached to the training of you for your two-week course to get you up and running, this is for the launch marketing, this is for stock, materials, equipment, uniforms – that sort of stuff.'” Sandra Venables, franchise consultant at Green Frog Consultancy, adds: “You should clearly be able to demonstrate what the upfront fee has been used for and you should be able to provide an itemised breakdown of the franchise package including the cost of the licence.”

The Franchising Centre. “If the fees aren’t high enough and the franchisee makes all the profit, then the franchisor isn’t going to have the resources to train and support them properly. If it is too skewed the other way and the franchisor makes all the profit, then the franchisees are going to fail.”
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Adam Pescod

EF's editor is tasked with ensuring these hallowed pages are rich with excellent, engaging and error-free stories for fabulous franchisors and franchisees. Pescod previously plied his trade penning pieces about pubs and pints. He is also a sucker for alliteration.
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