How to Set Up a Franchise in New Zealand?
- 1. Is Your Business Franchisable? There is a wide array of matters to consider before you set up your franchise. Pilot Operation You need to have a successful business model to create a successful franchise. ...
- 2. Franchise Documentation Once you properly develop your business model, the next step is to prepare the various franchise documents. ...
- 3. Franchisee Recruitment ...
- 4. Ongoing Franchise Management
Full Answer
How do I set up a franchise in NZ?
There are four key steps to setting up a franchise. You should: assess whether your business would translate into a successful franchise; prepare the necessary franchise documentation; recruit franchisees; and commit to ongoing franchise management. Can you buy a franchise with no experience?
How do I turn my business into a franchise?
How to Franchise a BusinessMake sure your business is ready to franchise.Protect your business's intellectual property.Prepare a financial disclosure document (FDD)Draft a franchise agreement.Compile an operational manual for franchisees.File or register your FDD.Set a strategy to achieve your sales goals.
How much money do you need to franchise a business?
Franchise startup costs can be as low as $10,000 or as high as $5 million, with the majority falling somewhere between $100,000 and $300,000. The price all depends on the industry, location and type of franchise.
How do franchises work NZ?
Franchisees invest in setting up the business in their own areas and are the owners of their own businesses. They receive their income from successfully marketing their products or services under the brand name of their franchisor.
Is franchising my business a good idea?
You should only franchise if it is a part of your long-term growth strategy and goals. Only franchise if your goal is to expand your brand and to build an organization to support and assist your future franchisees.
Can any business be a franchise?
Don't consider franchising your business unless you have a known, local market for your product or service. Marketability is determined by need, and need is determined by competition.
How do franchise owners get paid?
How do franchise owners get paid? Franchise owners can pay themselves a salary or depending on their business entity, they may be able to take a draw from their accumulated equity.
Do franchises pay taxes?
Franchise taxes are paid in addition to federal and state income taxes. The amount of franchise tax can differ greatly depending on the tax rules within each state and is not calculated on the organization's profit. Kansas, Missouri, Pennsylvania, and West Virginia all discontinued their corporate franchise taxes.
What is McDonald's franchise fee?
McDonald's franchisee applicants must have a minimum of $500,000 available in liquid assets and pay a $45,000 franchise fee. Those looking to launch a new McDonald's franchise can expect to shell out between $1,314,500 and $2,306,500. Existing franchise prices can cost upwards of $1 million or more.
What do you need for a franchise?
What Is a Franchise?Money for Getting Your Operation Off the Ground and Running. ... A Business Plan. ... Exceptional Management Skills and Experience. ... Regulatory or Legal Requirements. ... A Good Accountant.
Do franchisees own the business?
In franchising, a franchise owner partners with a corporate brand to open a business under the brand's umbrella. The franchisee owns and operates that location using the franchisor's brand name, logo, products, services and other assets.
What do you get when you purchase a franchise?
A franchise enables you, the investor or franchisee, to operate a business. You pay a franchise fee and you get a format or system developed by the company (franchisor), the right to use the franchisor's name for a specific number of years and assistance.
Why should I turn my business into a franchise?
Franchising allows bigger businesses to branch out and grow while giving people the opportunity to run their own business with the help and support of a larger company that has a proven formula for success.
What is franchising in small business?
Franchising is a business model that allows one business to operate under the established brand of another business and to sell its products and/or services for a specified time period. Franchising can be an excellent way to operate a business and is an alternative to setting up your own business.
How do you franchise a business in Texas?
Texas has not enacted franchise specific laws and is not a franchise registration state. However, Texas has enacted Business Opportunity Laws and, before offering or selling a franchise in Texas, you must first file a one-time Business Opportunity Exemption Notice with the Texas Secretary of State.
How do you franchise a business in the UK?
11 Key Steps for Opening a FranchiseSelf-Evaluation. What appeals to you about opening a franchised business? ... Pick a Franchise Consultant to Assist You (Optional) ... Research. ... Attend a Discovery Day. ... Speak to Other Franchisees. ... Find a Suitable Location. ... Choose a Franchise and Secure Funding. ... Sign the Agreement.More items...
What Advantages Does Franchising Offer?
If you operate a successful business but are lacking the necessary capital to expand by conventional methods, franchising could enable you to leap ahead of your competitors. Alternatively, if you are in a very fragmented market without a clear leader or dominant player, franchising can give you the opportunity to become the dominant player – and get there very quickly. These are just two examples why businesses might choose to use a franchise strategy for expansion. Other reasons include the ability that franchising offers to:
What is recruitment strategy?
The recruitment strategy will have been formulated in the implementation plan but the supporting documentation itself needs to be very carefully planned and written. This will guide prospective franchisees through all the stages of being granted a franchise in a seamless, co-ordinated process.
What is franchisee manual?
The franchisee manuals document the operating procedures and policies of your franchise system. To a large extent, the potential for success of a franchise system is determined by the quality and comprehensiveness of its manuals. Franchisee manuals: Set out procedures, systems and guidelines.
What is the first step in franchise?
The first step is to gather all the necessary information about the business that is to be franchised, and then the market intelligence to know the conditions in which the franchise must operate.
Why franchising a business?
If you operate a successful business but are lacking the necessary capital to expand by conventional methods, franchising could enable you to leap ahead of your competitors. Alternatively, if you are in a very fragmented market without a clear leader or dominant player, franchising can give you the opportunity to become the dominant player – and get there very quickly. These are just two examples why businesses might choose to use a franchise strategy for expansion. Other reasons include the ability that franchising offers to: 1 Achieve more rapid market penetration at a lower capital cost. 2 Reach targeted consumers more effectively through increased co-operative advertising and promotion. 3 Sell products and services through a dedicated distributor network. 4 Obtain operating efficiencies and economies of scale. 5 Increase market share and build brand equity. 6 Use the power of franchising as a system to obtain and keep more customers and build customer loyalty. 7 Replace the need for internal personnel (employees) with motivated owner-operators. 8 Reduce wastage and stock loss. 9 Improve competitive position. 10 Reduce administrative and overhead costs. 11 Improve the distribution channel through dedicated franchisees providing better service quality and operating efficiencies.
Do franchisors have real knowledge?
Remember, though, that franchisors often only have real knowledge about one form of franchise and one industry or business sector, and that particular format may not be suitable for your business.
Is EC Credit Control franchised?
EC Credit Control is probably less well-known as it is not franchised in New Zealand, but the Hawkes Bay company has used the franchise model to become a big name in Australia, the UK and Ireland.
What is franchising?
When someone buys a franchise, they are buying the right to use a prescribed ‘business format’ with an established brand, products and business processes, for a set period. The business format is owned by the franchisor, who has developed it over time. The franchisor sells the rights to use their business format to franchisees, who pay an initial fee and ongoing royalties.
What are the requirements for franchisees?
The requirements of franchisees – business skills, personality traits, work ethic, and financial position. The monitoring process used to make sure franchisees are providing similar quality products or services.
What are the advantages of franchising?
Some advantages of franchising your business include: 1 Using other people’s capital to expand your business. 2 New revenue streams from franchise fees and royalty payments. 3 You can focus on growing and strengthening your brand, while your franchisees concentrate on selling your products or services. 4 Empowered and motivated franchisees – as investors rather than employees, franchisees are more motivated to make their business (and yours) successful.
Who owns the business format?
The business format is owned by the franchisor, who has developed it over time. The franchisor sells the rights to use their business format to franchisees, who pay an initial fee and ongoing royalties. Here’s what you need to consider when you’re thinking of franchising your business. 1.
What is the GST rate on a sale and purchase agreement?
If it doesn’t, raise this with the seller. The rate of GST on the sale could be 15% or 0%, depending on the circumstances of the sale and purchase, eg whether the seller and buyer are GST registered.
What is due diligence in business?
Once you’ve registered formal interest, you can start due diligence — the process of understanding what assets, liabilities and commercial potential a business has. It should test the story the owner tells about their business.
What are the two parts of a business?
A business can be broken down into two parts — goodwill and assets.
How to build credibility as a buyer?
Appoint an adviser to talk to the owner’s representative. Professional advice is vital, but getting a lawyer or accountant on board also enhances your credibility as a buyer.
What is a long term contract?
long-term contracts. a business plan. good financial record or rating. If you’ve found a business you like the look of: Research the business, including its market and industry, its suppliers and competitors. If you want to proceed, formally register interest in buying the business with the person appointed to manage the sale.
What should be checked in due diligence?
Due diligence should check: pending court cases or other legal disputes, eg over intellectual property. the business owns all key assets, eg property, equipment, vehicles and intellectual property, and can therefore sell them to you.
What are restraints of trade?
restraints of trade, eg to stop the owner setting up a new business in the same market
What Is a Franchise?
A franchise is a model for expanding your existing successful business. You (the franchisor) recruit other people (franchisees) to set up and run a business based on yours, using your intellectual property, processes and systems, in different locations.
Franchisor Toolkit New Zealand
This publication provides you with the fundamentals for franchising your New Zealand business, including set up, branding and management.
Benefits of Franchising
Turning your delivery business into a successful delivery franchise will be an intensive process and not one that you should consider lightly. It is a long term commitment. However, if you develop your franchise well, you can take advantage of the benefits that this system provides and expand your existing business.
What Do I Need for a Franchise?
Before starting a franchise, you need to ensure that your business is ready for it. First, you need to have a successful pilot operation. Therefore, your business should have a point of difference that makes you successful, which your franchisees can replicate.
Franchising a Delivery Business
Regarding your delivery business, how you franchise it will depend on what aspect your franchisees will replicate. You will also need to consider what support you will give them and what resources.
Key Takeaways
Turning your delivery business into a delivery franchise can be a good way to grow your business and find new clients. First, however, you need to ensure your business is franchise-ready and appropriate for this model. This process requires good planning that tailors to your unique situation.
