Wednesday, January 12, 2011

Franchise business proposal

A reader asked for my views on this franchise business proposal. I am  not familiar with the business, but I know of many people who invested in the bubble tea franchise and lost their capital. If you have any inside knowledge of this franchise, please share it.


FRANCISE OF HEALTH PRODUCT
Franchise fee: 15k (3years)
Royalty fee: 5 - 6 % on sales
Marketing fee -1.5% on sales
 
The development manager/partner said that the total estimated cost is about 150k to 180k, with a breakdown for legal fees, misc fees, renovation, rental for 3 months, insurance etc.  It is a healthy food franchise. 


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1 comment:

  1. Tan Choon HongJanuary 14, 2011 11:43 AM

    There is a wealth of info online. Like multilevel marketing, some local franchises are 2nd or 3rd level deals and you could be paying extra to a master or sub-master franchisor who creams the fees for very little effort.

    Nothing ventured nothing gained. But discretion is the better part of valour. Do a thorough analysis with accounting pro and lawyer. One thing is certain – the franchisor, the renovation contractor and the landlord will come out ahead of you.

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