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Are there any benefits of being the first franchisee in a network?
I’m assuming what we mean here is being the first person to operate a unit under franchise, so what is often referred to as a ‘pilot franchisee’, ie someone who is piloting ‘franchising’, not piloting whether the business system works. We’ll further assume that there are already several company-owned units, against which the new method of operation can be tested. The first potential benefit is that the majority of the costs of testing franchising should be borne by the franchisor, although the testing needs to be done by someone with ‘skin in the game’, otherwise it is not a test of how an independent operator will perform. What often happens, therefore, is that the franchisor pays the set-up costs of the pilot unit, while the pilot franchisee will pay the running costs. If all goes well, at the end of the piloting period the first franchisee will be granted a full franchise agreement without having paid the upfront fee. The downside, if things do not go well, is that the franchisee may be left needing to find alternative income. Becoming a pilot franchisee is inevitably more risky, but it may present opportunities to guide the future development of the network - and early franchisees often form a bond with the franchisor that brings mutual benefits throughout their relationship.
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Exciting Franchise Opportunities
Companies to Consider
£120,000 net profit
Third party and personal investment
35% to 40% profit, depending on the business model
In excess of £70,000
£1,000-plus per week
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