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How do I make money as a franchisor?

I spent several days last fall touring colleges with my daughter.  It was a discouraging experience, for one reason.  Every college had chosen five or ten students to speak with parents.  The colleges selected the students, presumably, to showcase the college’s values and priorities.  Virtually every student proudly announced, “After graduation, I want to work for a nonprofit.”  Mere “money” was beneath them.  One even sniffed, “If I wanted to make money, I’d go to law school and be a greedhead lawyer.”

Well, thanks for the preening, but I’m a capitalist.  I want everybody making money.  The highest aspiration of the human soul is freedom.  Freedom requires an absence of want.  Absence of want requires material wealth.

So, although it may seem an unfashionable thing to consider, how do you make money as a franchisor?

Our next several posts will outline the ways a franchisor may make money.  The posts will treat:

  • Initial franchise fees
  • Periodic (weekly or monthly) royalties
  • Territory fees
  • Training fees
  • Development fees
  • Leases
  • Sales of products and services to franchisees
  • Sales of products and services to the public
  • Fees for services
  • Other fees

Here’s what you will find: the services you provide and the fees you charge are limited by little more than your ingenuity, business sense, and ability to maximize your returns in the marketplace.

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