Audience Questions from the Live Webinar

How can I tell whether the fees are fair?

In our experience, the initial reaction to the entry fee is often one of surprise. "Why is it so high?" "How can that be justified?" "I'd rather invest that money in my own idea." – These thoughts, however, are typically a significant misconception.

In detailed conversations, the added value quickly becomes clear. This package — comprising proven processes and structures, onboarding, training, databases, support with client acquisition, and much more — is something each individual must weigh up for themselves: whether paying this entry fee is worth it to them.

Across industries, these fees tend to be structured in a similar way. After conversations with the franchisor's head office and existing partners, most prospective franchisees find that these fees are well justified.

You mentioned that banks tend to grant loans more readily for franchises. Could you elaborate a little on why that is?

In order for an applicant to be granted a loan, the bank reviews the candidate based on their CV and decides, in a very subjective manner, whether they believe the applicant is capable of running this business model and therefore whether to approve the financing.

"I've been approached by various franchise systems where I had a clear sense that they were only interested in collecting the entry fee or territory fee."

One very important quality criterion is whether the franchise system you are considering is certified by the franchise association. This certification process is highly complex. The business model and the plausibility of the figures are analysed in depth. This criterion helps you avoid getting involved with highly questionable systems.