About to do a franchise, need some advice

Apollo_Auto · 11-06-09, 11:33

Hi everyone! I've been approached by about 4 or 5 different people about franchising my company but I've always turned them down until recently. A long-time customer of mine, who also happens to be filthy rich, approached me with the idea of making another Apollo Auto entity in the region where he lives. I trust this guy and he trusts me and I've got the skills he's got the bread, so I can't think of a better partner. Basically this "other me" would be trained by me, etc. and wouldn't be my "own competition" as we'll be in different regions. Also, the BIG polishing jobs will still all be carried out by me, because until this person can hone his skills, he'll be doing 1-step polishing only with a DA.

My questions >>

1. The "investor" will be investing money only. All the training, managing, etc. will all be my responsibility. Into what percentages should the profit be divided?? Keep in mind, my company has been in operation for more than 2 years and all the work thus far (corporate identity, methods, marketing, etc.) have been done by me alone. A SH1TLOAD of work IOW.

2. I'm a detailing supply distributor in HU and at the moment it's nothing big, as I haven't had time to work so much with it next to detailing. He also inquired about that and was asking if it's worth getting into and I said yes. Should I get him in on that too and do it on a much larger scale?

I guess that's the only questions I have for now, TIA for any advice! BTW my web site is www . apolloauto . hu if you'd like some more info on the company.

- Jesse

POPPAJ · 11-06-09, 11:50

I would think that your investor would want a return on his investment plus interest before any split on the "profit". I'd be surprised that he doesn't already have something in mind, talk to him.

yakky · 11-06-09, 01:50

Sounds interesting, but you need to find someone that has been on the other side. I know you trust this guy, but he is a business man and will milk you for all you have. Its nothing personal, its just business. Do your homework and then start working out a deal.

JohnKleven · 11-06-09, 03:03

Why would he franchise your business to do one step da polishes? That's easy enough without paying a franchise fee.

John

Apollo_Auto · 11-06-09, 03:30

Quote:

Originally Posted by JohnKleven

Why would he franchise your business to do one step da polishes? That's easy enough without paying a franchise fee.

John

Thanks for the advice all! John >> I'm pretty much the pioneer of this type of detailing service in this country and the name that I've already earned for myself, the knowledge I have and the image that my company has is what my friend wants to franchise... anyone can buy some soap and buckets and say that they're a "mobile detailer", but what I offer is much different.

People don't franchise hamburger stands because they're the best hamburgers in the world; they do it because there's a feeling about it that makes it stand apart from the rest. This is what my company has here in this country.

Krafcik · 11-06-09, 04:42

I would look at what other companies charge for franchise fees. I would expect 5 to 10k up front to use the name. He should then pay you a percentage of the profits - typically of 6% of net sales plus 2% for branding.

Plus I would charge the training fee - if he is taking time for your shop, you should be compensated at your hourly rate.

efnfast · 11-06-09, 05:22

I don't have any franchise experience, but I think you might be SOL if you ever try to start one up here in Canada with the Apollo name

JohnKleven · 11-06-09, 05:32

Quote:

Originally Posted by Apollo_Auto

Thanks for the advice all! John >> I'm pretty much the pioneer of this type of detailing service in this country and the name that I've already earned for myself, the knowledge I have and the image that my company has is what my friend wants to franchise... anyone can buy some soap and buckets and say that they're a "mobile detailer", but what I offer is much different.

People don't franchise hamburger stands because they're the best hamburgers in the world; they do it because there's a feeling about it that makes it stand apart from the rest. This is what my company has here in this country.

I see. I think it's a great idea then, just make sure to keep any other stores properly trained so they don't damage your good reputation. Good luck with your venture.

John

jdoria · 11-06-09, 05:51

People also franchise infrastructure, logistics, and procesess...

3 complex things that sink most new businesses.

Jesse will be selling the following to a franchisee:
Process
Policy
Logistics
Infrastructure

Jakerooni · 11-06-09, 06:01

Not sure how the laws are over there but I know you'd have to come up with some sort of FOC. I would contact a lawyer on the matter to make sure you both are covered. You just never know what happens.

Apollo_Auto · 11-07-09, 01:16

Quote:

Originally Posted by Krafcik

I would look at what other companies charge for franchise fees. I would expect 5 to 10k up front to use the name. He should then pay you a percentage of the profits - typically of 6% of net sales plus 2% for branding.

Plus I would charge the training fee - if he is taking time for your shop, you should be compensated at your hourly rate.

Good input, thanks!

Quote:

Originally Posted by efnfast

I don't have any franchise experience, but I think you might be SOL if you ever try to start one up here in Canada with the Apollo name

I wonder what happened to mister "I hand wax cars while wearing a ring"...

Quote:

Originally Posted by JohnKleven

I see. I think it's a great idea then, just make sure to keep any other stores properly trained so they don't damage your good reputation. Good luck with your venture.

John

Thanks John! I'll be sure he/she is properly trained!

Quote:

Originally Posted by jdoria

People also franchise infrastructure, logistics, and procesess...

3 complex things that sink most new businesses.

Jesse will be selling the following to a franchisee:
Process
Policy
Logistics
Infrastructure

Roger that, Justin!

Quote:

Originally Posted by Jakerooni

Not sure how the laws are over there but I know you'd have to come up with some sort of FOC. I would contact a lawyer on the matter to make sure you both are covered. You just never know what happens.

Yarp, I'll definitely have this one done by my lawyer...

Got More Wax · 11-14-09, 10:32

Quote:

Originally Posted by Apollo_Auto

Thanks for the advice all! John >> I'm pretty much the pioneer of this type of detailing service in this country and the name that I've already earned for myself, the knowledge I have and the image that my company has is what my friend wants to franchise... anyone can buy some soap and buckets and say that they're a "mobile detailer", but what I offer is much different.

People don't franchise hamburger stands because they're the best hamburgers in the world; they do it because there's a feeling about it that makes it stand apart from the rest. This is what my company has here in this country.

Mmmmmmmmmm, hamburgers!!!!!!!!

Jesse's gonna be one of those rich SOB's who hires us to detail HIS car!!!!