Personal Fitness Professional - June/July 2009 - (Page 24)

HUNGRY for a Franchise? The ins and outs of deciding whether to franchise or not By Scott Wendrych e Money When buying a franchise, you will pay a franchise fee along with costs to rent, build and equip a location. You will need to cover basic operating costs, insurance and licensing. Owning this business is not a one-time purchase but an agreement with a franchisor to operate it for a certain number of years, at which time it must be renewed. You will make royalty payments to your franchisor for weekly or monthly gross income. And you will likely pay into an advertising or marketing fund, which may include a portion of those dollars going into a national ad fund that may be used to attract new franchise owners and not support your particular outlet. ese sound like large expenses for a franchisee on a local level. But magnified by the number of franchisees who operate under that same brand you get the big picture. A franchisee should expect to receive something from the franchisor in return for paying royalties, such as assistance with site selection and lease negotiations, marketing assistance and support, business support, website design and ongoing training and support. Basically, it’s like hiring a team of business professionals to help them grow their business. Full Disclosure To thoroughly review any type of franchise, you want to request a Franchise Disclosure Document (FDD) from the company. By federal law, every franchisor must create an FDD that discloses an overview of the franchised business, along with the associated costs and fees, a list of current franchisees, where they are located and more. Each FDD must contain 23 items of information, written in plain English that must be current for the franchisor’s most recent fiscal year. e FDD is given to any prospective franchisee on the first personal meeting with a franchisor or 10 working days prior to the execution of a contract or money payment to the franchisor. is is purposely designed for every potential franchisee to make a fully informed decision before purchasing a franchise. e Federal Trade Commission requires this creation of the disclosure, and some states also require approval of the FDD before the franchisor is allowed to sell franchises within that state. ere’s a big divide between those who want to own a fitness business and those who want to own a fitness franchise. e independent business owner wants to sit in the driver’s seat and build something from the ground up. e fitness franchise owner wants to be in the driver’s seat with a roadmap that also gives him directions. So how do you decide if franchising is or is not for you? e Mindset Franchising is not for people who want to invent a business. Aside from the founder who conceived and built the franchise model in the beginning, the business exists to be replicated. Buying a franchise means purchasing the rights to operate that business, a system that has been designed and refined by a franchisor and then executed over and over again by the franchisees who have expanded the network. e most effective franchise owners are those who are very good at following a proven system while adding their passion and drive to grow their business. e best way to think about franchising is to consider it as hiring a professional business consultant in a particular industry. JUNE JULY2009 WWW.FIT PRO.COM

Table of Contents for the Digital Edition of Personal Fitness Professional - June/July 2009

Personal Fitness Professional - June/July 2009
Letter From the Editor, Writers
First-Class Management
Product Profile
You Are at Risk
Nutrition Solutions
How to Handle Health Insurance
How Much Should I Charge My Clients
Twitter This, Facebook That
Young at Heart
Be Better
Hungry for a Franchise?
The Balancing Act
Exercise Spotlight
Journey to Success
New on the Market
[Facebook] PFP Fan Page: Sneak Peek
Fitness Marketing Makeover
Effective Sports Camps

Personal Fitness Professional - June/July 2009