Website design franchise

[Det]

I agree that there are costs associated with any business, but I'm of the opinion that a £10k purchase fee would leave enough in the kitty for initial advertising in the new franchise area. After the first few months the franchisee should be in a position to pay for any advertising they want to do, if they find it necessary.

I also believe that you need a certain amount of cash input from the franchisee or they have no vested interest in their own business.

I looked at buying a franchise years ago with a large estate agency chain. The purchase cost was reasonable but the running costs were ridiculous. By the time you'd finished paying your share for advertising, national magazines and administration costs it meant you needed a massive turnover just to stand still. Great 12 months in when you have built the business to a sustainable level but initially you'd be using your overdaft. Not a good way to start any business.

We've set the price of our franchise at £699 and that just about covers the cost to us. For me it's about working in a partnership with your franchisees and both earning money from that, rather than making money from selling the franchise.

We also deal with all the technical stuff at H/O so the franchisee can spend time in the field making money.

But who am I to talk? I have 3 franchisees and Activ have hundreds. Maybe I'm doing it wrong.

[BritWeb]

Hi Det - all good stuff. I guess the set up price and monthly fees can be set to fit your franchisees. We have a different approach - our monthly fees are only £50 so it not a big deal but contributes to the head office activity. I agree your model should be set so a franchisee is successful and so is the franchisor fairly.

I hope this info is useful to the thread starter.

P.

[Det]

I would hope that by now the thread starter has already made a decision.

I'm simply interested in how people see franchises and what makes people choose one over another.

It would be good to have a proper chat with you about our respective franchise opportunities at some point. I'm always up for picking peoples brains.
But as we've only been franchising for a short while I doubt you'd get much useful info out of me.

[BritWeb]

Hi Det

Feel free to PM me for a chat.

Paul.

[carl22]

i hope this person did not buy into Activ Web Design as I have heard it's not great and you end up paying a monthly amount and make very little in way of sales - there is a lot of evidence that the model is not working and there are a lot of unhappy franchisees who have either left or trying to leave - Activ have hundreds because they are good at selling a dream which soon turns into a nightmare and once you have signed the contract you are tied in for 5 years paying monthly even if you don't make any sales. Steer clear is my advice.

Also web design should be left to web designers and not people who have little knowledge of SEO, hosting, domain names and CSS, HTML

[Det]

It's always a problem when a company ties you in for a long period, whether that is a franchise, a lease company or even a mobile phone deal.

Things change and even if you do well with your franchise, you may find that you need to give it up for some reason.

My advice would always be check the small print.

[nhs99v]

Originally Posted by carl22

i hope this person did not buy into Activ Web Design as I have heard it's not great and you end up paying a monthly amount and make very little in way of sales - there is a lot of evidence that the model is not working and there are a lot of unhappy franchisees who have either left or trying to leave - Activ have hundreds because they are good at selling a dream which soon turns into a nightmare and once you have signed the contract you are tied in for 5 years paying monthly even if you don't make any sales. Steer clear is my advice.

Also web design should be left to web designers and not people who have little knowledge of SEO, hosting, domain names and CSS, HTML

I have to agree with this quote tbh! 5 years is way way too long to sign up to this type of commitment. My initial advice would be to go and invest a week or so learning wordpress, playing with its flexibility, using some templates, etc from other designers and see how you get on with that before committing to something like this.

[Bill Ryan]

When you are considering a franchise you need to look very closely at what you are actually buying and what your committments are to the franchisor.

There are some (and I am not suggesting that this is one of them) whose business model would seem to be getting as many people as possible to pay a substantial fee to purchase the franchise.

After that the promises mean nothing because the devil is in the detail of the franchise contract.

You need to understand everything on your contract before you sign.

[Det]

While I agree with checking the contract, some smaller franchise operations, myself included, simply ask a solicitor to write up the agreement and take their advice as to what should go into it. Not being a solicitor we agree to clauses which we're assured are necessary but aren't sure we should have.

In this day and age it's necessary for the franchisor to be protected from unscrupulous franchisees as well as the other way around.

As I think has already been stated here, it's always a good idea to talk to the franchisor if there are clauses in the contract which you're concerned about. Negotiation is possible in any business arrangement and franchising is no exception.