In a recent article on Forbes.com, Carol Tice named 3 different franchises that had slashed their franchise fees.
- Dunkin Donuts
- Papa John's
I'm not sure why all of them are in the food sector...
I'm not usually in favor of lowering franchisees...unless the reasons make sense.
For example, if a franchise fee is being lowered as an incentive for a military veteran, I'm all for it. The veterans that are now coming back from their call of duty aren't going to be flush with cash. They need some help. Go for it, franchisors!
The second reason that lowering a franchise fee could makes sense has to do with competition; are other franchises in the same sector setting fees that are at least 25% less?
If so, a serious look into fee structure is warranted.
(Unless the franchisor with the substantially higher franchise fee is offering a lot more in way of support, tools, and experience.)
What do you think?
Does lowering franchise fees cheapen the brand?
Read the Forbes.com article...it's a good one.
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