From time to time a franchisee might ask, what do you do to earn your 5% franchise fee? It is a misconception that as a franchisor we have to earn a fee. We don’t have to exchange time and effort at a rate equal to what we are paid in franchise fees. In fact, the payment is essentially a royalty that you pay for using the business format model that we have developed, and some franchisors do very little to receive this and often charge 7 - 10%.

However, the model we have developed is unique in that there is a strong synergy between the franchisor and franchisees, and it does include the following that supports franchisees directly or indirectly. Also note that unlike other franchise systems, we do not run a marketing fund, which is often used as a slush fund for the head office.

Prizes

• Holding a variety of stock which is immediately available to franchisees. (We hold a minimum of $500,000 wholesale stock)
• Maintaining a franchisee online shop for franchisee convenience
• Running credit accounts for franchisee convenience
• Allowing returns of some stock with handling fee (Refer to returns policy)
• Direct licenses with sporting bodies e.g., NRL, ABS and managing these including minimum guarantees
• Advance ordering to meet major movie releases
• Testing and advising on product sizes for different machines
• Research and Development on prizes

Marketing

• Maintaining and developing siting material (available in the manual)
• Posters – sourcing and/or designing and holding stock of
• Maintaining the relationship with Countdown stores and managing the administration/payments
• Maintaining relationship with AMP and handling administration
• Help with personalized proposals to sites
• A professional sales website to assist in selling franchises

Business Support

• Maintaining a comprehensive online operations manual
• Supplying a route management software program
• Running a Facebook information/communication group
• Providing stats and figures monthly individually
• Benchmarking against other franchisees
• Providing a business structure that allows inexperienced purchasers to buy franchises off departing franchisees
• Taking all phone calls from franchisees and helping - some franchisees call us as many as 10-20 times per week

Technical

• Maintaining a parts inventory for ordering
• Staffed tech help line
• Videos and instruction both on the Facebook group and in the manual
• Assisting new franchisees who purchase from departing franchisees

MISC

• Maintaining a machines inventory available for purchase
• Assisting troubled franchisees to exit with as much intact as possible
• Uniforms
• Business Cards
• Group Public Liability insurance
• The franchisor does not pursue their own supply relationships with multiple companies like a normal company. The franchisee benefits substantially from this.

Sales

• Assisting with valuing the business
• Assisting with your purchaser
• Ensuring a smooth transition in selling the business
• Maintaining a good reputation as a franchise so that franchises hold their value
• Giving incoming franchisees confidence to purchase businesses, enabling a smooth handover process.

Franchisees who find themselves questioning the value of the franchise fee should consider the above and whether any or all of the above represents value of more than 5% of their revenue. If they still feel dissatisfied, discuss this openly with the support office.