The basis for franchise fees
In franchising, size and popularity matters.
By: Armando Bartolome | Apr 10, 2012 15:00 pm
Q: What is the basis for the amount of the franchise fee, especially if you're franchising in the Philippines? Are some companies asking for higher franchise fees because they're already big companies, or they already have many outlets?
A: As the franchise fee is the amount you pay for the use of the name of a company, it logically appreciates as the value of the brand rises as it becomes popular. There are big players in the country which began with a fairly reasonable fee. However, as the brands expanded and established a strong following of customers, their franchise fees increased. A good franchisor, though, always considers the profitability of the incoming franchisees prior to doing any adjustments in the fee.
Armando "Butz" O. Bartolome is currently President of GMB Franchise Developers, the pioneer franchise development company in the country and is behind the growth and expansion of over 200 local companies. You may reach him at email@example.com or post your franchising how-to questions here.