If you’re thinking about opening your own chicken franchise, we say, good for you! Franchising is a great way to become a business owner, especially when you partner with a franchisor like Golden Chick. Still, as you move through the process and learn more about the world of franchising, you might be confused by some of the terminology you’ll come across. Franchising allows you to be in business for yourself but not by yourself, and it’s a fairly unique world: one that has a long history and a bit of its own language. Here, we’ll look at some common franchise terms you may be coming across and what they mean.
Franchisor: On the surface, a franchisor is simply the company or brand that offers a franchise opportunity to investors, or franchisees. But in reality, a franchisor is much more than that — or should be. A franchisor is another name for the people behind the brand. Franchisors sell the right to open stores and sell products or services using their brand name, expertise, and intellectual properties. They’re also the people who make sure their franchisees are well-trained and ready to do business as a representative of their brand — and the training and support we offer is one of the best reasons to consider Golden Chick when thinking about opening your own chicken franchise.
Franchise Disclosure Document (FDD): An FDD is a very important standardized document required in the U.S. by the Federal Trade Commission (FTC) for all franchisors to have. Our FDD is provided to serious potential investors to answer many of the questions they may have about the Golden Chick brand and its offering, including the history of a brand, its team leaders, the investment numbers, and what you can expect from a franchisor in the way of training and support. Investors also learn more about what’s expected of them as a franchisee and any monthly fees they’ll be responsible for.
Because the Golden Chick FDD is such an important document, you’ll be given at least 14 days to read it before anything can be signed, and many of our franchisees have reviewed their copy of our FDD with the help of an attorney.
Franchise Fee: As part of the cost of becoming part of a brand family, all franchisors charge their franchisees a one-time franchise fee once they sign their franchise agreement. This fee pays for an investor’s onboarding, pre-opening training, and the right to use proprietary materials and resources. When opening your own chicken franchise with Golden Chick, you can expect to pay $30,000 as a one-time franchise fee for your first location, and $18,000 for each additional restaurant you wish to open.
Initial Investment: As with starting any new business, opening your own chicken franchise with Golden Chick requires an investment in not only time and effort, but in money as well. An initial investment refers to the total financial investment a franchisee will need to make in order to get the franchise business up and running. This sum includes all startup costs, like the franchise fee, leases, build outs, inventory, and so forth, and is typically represented as a range, showing low-end and high-end amounts.
Royalties: As part of the way a franchisor continues to support its franchisees and grow its brand, royalties are collected each month against the gross sales of each franchise location. In our case, that fee is 4% of a franchise’s gross revenues (currently the lowest in the industry). Among other things, this money is used to fund the on-going support provided, R&D of new products and services and improved operating processes and technological innovation.
These are just a few of the terms you’ll likely come across as you research franchise opportunities. Reach out to us today for more information on the Golden Chick investment!