The Advantages of Paying Royalties

One concern that I hear people make about franchising is “I don't want to share my money with anyone.”? What they're talking about is royalties. Every franchise has their own royalty structure, it’s usually a percentage of the franchisees’ gross profits.?

Training and Support

When people are talking to me about franchising, they say “If I start my own business from scratch, I don't have to share my profits with anyone.” That is true, but what they don't understand is that you are exchanging a little bit of their profits for a tremendous amount of training and support that they get throughout the life of their business. Most people who start from scratch have never owned a business before and that leaves a lot of room for mistakes; expensive mistakes sometimes. They have to create all of their systems and processes, test them to make sure they're effective and that could take quite a bit of time and not to mention money because they are building these systems through trial and error.? Whereas the franchise already has the systems and process in place and they have been tried and tested and they are sure that they work.? So, while you may have to pay royalties to the franchise and share some of your profits, in reality it may be only a small percent off of your gross profit, but what you get in return is much greater.?

Franchisors Want you to be Successful

The really good franchisors know that if they train and support their franchisees for as long as they own their franchise, that they are more likely to be successful. If the franchisees are successful and profitable they will then be able to pay their royalties. The franchise has a vested interest in the success of the franchisee, imagine a safety net under their business.? Therefore, the really good franchises make their money from the royalties their franchisees pay and in exchange they are prepared to provide lots of support.? If the franchisee has any concerns or any problems with their franchise, or needs additional help or training on the business systems the franchise is going to be there to support them, because they're paying their monthly royalties.. So in reality you are exchanging a little bit of profits for a tremendous amount of support. Think of it as you're in business for yourself, but not by yourself.?

If you want to know more about the advantages of paying royalties to your franchise, click on the link below and let's talk about it.