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FRANCHISING WHAT CAN I SAY

Have you considered the potentials, benefits and profits of investing in a Company that has developed a franchise system and in the process of building a franchise network with the short term goals of selling the Company to a larger Franchisor 18 to 36 months from now? Royalties collected from a franchise network creates tremendous value long term. Why? Most franchisees sign a Franchise Agreement for 10 years with an automatic renewal for another 10 years therefore the terms are basically for 20 years.

If a Franchisor collects 10% from a franchisee on a monthly basis and the annual gross revenues are $1 millions from the franchise business, that franchisee is worth $100,000 each year to the Franchisor. That amounts to $2 million for the 20 year agreement. A Franchisor with a network of 50 franchises all producing and paying royalties similar to the scenario mentioned would create a value of the Franchisor in the sum of $100 million. The selling price of that Franchisor Company could reasonably be around $40 million.

A Franchisor that offers 20% in equity of their Company to a private investor when the Company sells would result in a short term ROI of $8 for every $1 invested. Sound interesting? Want to learn more? Contact me for particular Franchisor’s offering this type of returns and even more.


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