Trying to find out how to franchise my business

[keenan]

Hello all,

My name is John. I own a web design company on the Internet where I sell currently about 100 "as is" to as many clients as we can with their clear understanding they are buying a site that others have also bought. We also create custom sites everyday for many clients. I want to offer the opportunity to someone to buy into the business to be a franchisee for a set price. I also want my team to be the exclusive designers that can put the sites together and make changes to them that the franchisee is able to sell. The franchisee can mark up the prices as much as he or she wants to. There is tremendous room for marking up for our "as is" sites are only sold for $295.00 and we have competitors that charge anywhere from $500 - $1500 and they make good money at it. Basically what I want to have the franchisee do is to be able to buy in to have the rights to sell the sites. There is a ton of money to be made for anyone in the states and internationally that can sell. I don't think we want to charge a percentage of the revenue the franchisee takes in but we might charge 3% or so if we even attempted to do that. I am looking for as much advice as possible. I am finding a considerable amount of people wanting to sell me a franchise but haven't found a good place to get advice from people that have franchised a business.

I am all ears if someone can share some knowledge. Would appreciate it tremendously.

Best Regards,

John

[RyneL]

Hey, have you considered doing an affiliate program versus Franchising? Franchising typically requires rigid guidelines from the parent company, and a monetary buy-in on the part of the franchisee. On the other hand, based on what you've said with the post, you are looking for an affiliate program. How this works is that your team produces the materials, and you can sell them on your own site, but any one else who sells for you on their site, or from their business, gets a percentage of the cost. (usually this varies from 25%-75% commission of sale price) Another option within the Affiliate program is along the lines of what you mentioned. It's called re-branding. The affiliate rebrands it XYZ webservice and it appears that his company is the one producing the goods. He charges your $295, plus whatever additional he wants to keep as commission. He is responsible for promoting it, etc. Your team does all the work and gets the $295 off the top. Thus, there is no financial upfront cost involved, unlike franchising, and you stand to lose no money of the sale!

I am working to get a couple of things off the ground right now, but I would like to know how this works for you if you pursue it, and I'd like to consider something like this with you in the future.

[keenan]

Hey, I appreciate your response to my post. Much appreciated. I am well aware of the affiliate world and would like to bring this to the next level. We are very aware there are some very good people that can sell a #3 pencil as better than a #2 pencil by one. There was a study completed ont his and the people chose the #3 pencil but couldn't exactly explain why it was better.

We want the people to have to buy in because we don't just want affiliates. We would get more than enough of them without getting to know them and haveing the ability to make sure we are a good match. If we could get 10 - 20 salespeople that would buy in to have the rights to sell, we could work with them closely and guide them through every aspect of this business.

We wonder if we can charge an upfront one time fee to buy in to have the rights to sell our products, make the client exclusively use our tech people for changes to sites and for creation of new sites and also grab a tiny percentage of their money say 3% or so of their revenue? Is there a way to do this without franchising?

We know guys that are doing this that call it a distributorship but I don't see how it meets that definition. Is there any other legal classification we could fall into?

Also, what does it cost to franchise a business? I am only talking about getting contracts written up by attorney and federal governement fees.

Best Regards,

John