Five Most Expensive Franchise Types
There are thousands of franchises in all type of industries, some of which can be started for as little as $25,000 and some of which require millions of dollars. Here are five of the most expensive industries for franchise businesses:
1. Hotels and motel franchises
Hotels and motels are generally the largest franchises and are far and away the most expensive. Hotel and motel franchises of all different price and quality levels cost a couple of million dollars to begin. The real estate is expensive to begin with, and then building out the hotel property costs a lot more property size. One of the most expensive franchises in this area may be the Doubletree by Hilton, which can cost upwards of $50 million to get started.
2. Restaurant franchises
Casual restaurants like TGI Fridays cost around $1 million to begin. A Denny's, for example, costs between $1 million to $2 million to start up.
3. Fast food franchises
While not all franchises in this category are very expensive, many of the biggest fast food names, such as McDonald's and Burger King charge higher franchise fees than some lesser-known chains for the universal power of their brand names.
4. Gas station/convenience store franchises
This category is dominated by large national names like 7-Eleven that cost about a million dollars. Only some locations have a gas station, but that addition significantly tacks on to the total costs.
5. Storage franchises
The massive commercial space necessary for a storage franchise is the biggest expense incurred
The Financially Distressed Franchisee
In dealing with an individual distressed franchisee, the following questions need to be asked:
Banish The Fear of Selling... Forever
Most prospects come with a firm belief in the product or service…but a limited strength in sales and marketing. Yet sales and marketing skills are the very skills they need to sell themselves and their services…the skills they need to keep the business alive! If your potential franchisees and existing franchisees are like most…they are lacking the "selling gene".
Common Mistakes Made By the Franchisor Buyer During the Due Diligence Investigation
Franchise merger and acquisition talks always start with the best of intentions. After all, a well-executed franchise system merger can lead to enhanced scale (for increased buying power and leverage over suppliers), reduction of overhead and operating costs (through elimination of duplicate staff, departments, and locations), and increased revenue (through cross-selling of products or services, optimization of distribution channels, and bolstered brand recognition and standing in the eyes of prospective franchisees).
