More Incentives: Good News for Franchisees

As competition for franchisees heats up, franchisors are rolling out incentives to turn their heads. Discounted franchise fees and reduced royalties are meant to appeal to newcomers to franchises who may have more difficulty finding financing. Current multi-store franchisees may be drawn by incentives to open or take over additional stores.

The Wall Street Journal reports, “Among the incentives he (David Nilssen) has seen are franchisers not charging royalties on the first six months of revenue and chains contributing $10,000 to the grand-opening marketing package if a buyer opens a second store in under a year.”

Elizabeth Garone’s article goes on to speak about specific franchise incentives, including, “At small franchises, incentives can make a huge difference in spurring growth. In 2013, Buffalo Wings & Rings awarded three locations. In 2014, after slashing the franchise fee to $5,000 from $35,000, the Cincinnati-based sports-restaurant chain awarded 17.”

The bottom line: both large and small franchisors are offering incentives in an effort to draw the best franchisees and continue growth of their chains.

Read the full article.


Issues Facing Franchisees

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