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Franchise Terms to Know Stage Coach Cheryl Lowe always had a knack for decorating. After taking time off from her career as a software engineer to raise her children, she decided to turn her hobby into a business. In 2013, she launched a home-staging service, now known as Chic Chateau. “Most customers are folks who are selling their homes and want to get top dollar,” Lowe says. “There’s a huge demand for our services.” As the business grew, folks often asked Lowe how to start their own staging companies. The question prompted Lowe to look into franchising, which seemed like a natural fit. Today, she offers franchise opportunities. There is no design experience needed. “You just need a love of decorating. We teach franchisees how to do everything else,” Lowe says. “Chic Chateau is a unique offering in home-decorating services,” according to Cindee Brown of Turnkey Franchises. “It’s a great fit for anyone looking for a low-cost way to start a home-decorating business.” For more information, visit www.chicchateau.com 18
There’s lots of terminology that goes along with franchising. Below is a continued list of terms we started in our August issue. For a more extensive list of franchise terms, check out our resources tab and look under “Franchising 101,” or click this link http://franchisedictionarymagazine.com/words-to-know/ Franchise fee: The initial up-front fee a franchisee pays for the right to purchase a franchise and use the trademark and business system. This is typically paid at the signing of the franchise agreement. Franchisor: The franchise company and owner of a franchise system’s trademark brand that provides usage rights to a franchisee. Federal Trade Commission (FTC): A federal agency assigned to regulate franchises. This agency protects America’s consumers and assists in protecting them against false, deceptive, or unfair trade or advertising practices. International Franchise Association (IFA): Founded in 1960, this membership organization includes franchisors, franchisees, and suppliers.
Initial investment/start-up costs: The initial investment that the franchisee makes in becoming a franchisee during the start-up period. Receipt acknowledgment: In franchising, the receipt to be signed by a potential franchisee as proof of the date of receiving the FDD. Renewal: Franchise agreement lengths vary and expire after anywhere from five to 20 years. After the initial agreement, the contract may be renewed but not always under the same original conditions. A renewal fee may be less than the original franchise fee. Royalty fee: The share or percentage of gross sales paid by the franchisee to the franchisor on a recurring basis from the franchisee’s generated sales.
Susan Scotts is an alternative career coach at The Entrepreneur’s Source. Contact her at 561-859-9110 or coach@susanscotts.com
FranchiseDictionaryMagazine.com
