CFCG Franchise conulting (2024)

FAQs

Are franchise consultants worth it? ›

In a nutshell, a candidate benefits significantly from working with a franchise consultant by gaining access to expert insights, efficient decision-making, and tailored opportunities.

A typical franchise consultant may be paid by the franchisors they represent by taking commissions on the sale and/or a portion of the franchise fees that you are paying to become a franchisee.

Owning a franchise can provide financial stability for franchisees, as they're able to rely on a proven business model and established brand recognition to drive revenue. This can help reduce the risk of failure and increase the likelihood of long-term success.

Improper management and operations is the leading cause of business failure, and in franchising – where the franchisor does not have control of the day-to-day management of the franchisee's business – there is often little the franchisor can do to prevent franchisee failure.

Franchise statistics show 92% of franchises are still in business after two years. 85% of franchises are still in business after five years. Compare those franchise statistics to those of independent small businesses.

The exact earning potential will depend on several factors, including the type of franchise, the location, the investment level, and the franchisee's ability to effectively operate and manage the business. On average, franchisees can expect to earn a profit of 4-12 percent of their gross revenue.

So if you make an average of $500,000 a year in sales per unit, you only need 20 units to get to $1 million. If you have a franchise brand that makes $1 million in sales, you only need 10 units to make $1 million in profit. But, you'll need a whole lot of initial upfront investment to get there.

As of Jun 12, 2024, the average annual pay for a Franchise Broker in the United States is $66,677 a year.

Royalties are typically a percentage of your gross sales; you pay them regularly, usually monthly. The U.S. Small Business Association (SBA) notes that royalty payments normally range from 4% to 12% of the franchisee's gross revenue. Some brands will set a minimum dollar amount that the franchisee must pay.

Chick-fil-A, Inc. offers qualified individuals the opportunity to operate a single Chick-fil-A^® franchised restaurant. The restaurant can be located in a mall, or it could be a free-standing, Drive-thru only, or an in-line location. We do not offer multi-unit franchise opportunities to initial applicants.

What happens if a franchise fails? ›

If a franchise business collapses or due to some reason becomes bankrupt, then unfortunately not many options for the franchisee. The franchisee has the right to use all franchisors' assets, including the brand name, trademarks, and other products and services, etc.

1. McDonald's. McDonald's is the world's largest franchise network with an incredible $89 billion in global sales. Despite increasing competition, it has held on to this spot every year since the rankings were first released in 2000.

The average failure rate of a franchised brand is 17% (or the inverse, franchises have an 83% success rate). Over 60% of 'normal' businesses fail (only 40% success rate).

Working with a Franchise Consultant is very beneficial because they guide candidates throughout the franchise discovery and investment process. While having one as a guide is excellent, the final choice is ultimately up to you.

They provide expert advice, helping entrepreneurs find and select the right franchise opportunities that match their skills, interests, and financial capabilities. Consultants are typically well-versed in the franchising landscape, offering insights into various brands and sectors.

In short, your franchise consultant will be your guide, your sounding board and your advisor and he/she will also keep you well grounded. All of this is extremely important when you are planning on starting a franchise business. This sets you on the right track from the outset and helps you avoid expensive errors.

While there are many benefits to working with a franchise broker, it's important to be aware of the potential downsides: Commissions: Since brokers earn commissions from franchisors, there might be a bias toward recommending certain franchises over others.