As franchise system development becomes more competitive and attracting qualified franchise candidates becomes more challenging, franchise systems are employing a new strategy to grow their brand and increase franchise sales.
This strategy is based on presenting a choice of buildout options within their investment offering. Buildout options are defined as two or more investment ranges for a specific franchise brand. This could mean two types of locations, with a variety of investment ranges, that differ based by square footage, territory size or other market differentiation.
We identified 299 franchise systems in our database which offer multiple buildouts. With a total of 819 buildout options available within the 299 franchise systems, we dug deeper into the Item 7 buildout options.
What you will learn in this report:
At Franchise Grade, we discovered that even if you offer multiple franchise buildout options and open yourself up to more available prospective franchisees, you are increasing the number of franchises you are competing against for the same investment dollars.
We have completed a study on the changes in Ongoing Fees in the franchise industry using our data from 2013 – 2016 to publish the report.
A Franchise Disclosure Document (“FDD”) presents key components of the franchise program including the obligations of the franchisor and franchisees.
The composition of the franchise investment differs in key areas such as: franchise fees, royalty rates, territory protections and Item 19 disclosures.
Data has become essential to having a successful franchise development team. Those that maximize the power of data will sell more franchises.
When reviewing an FDD, we always keep our eyes out for any errors. The error that is the most troublesome for us is when we see Item 20 errors.