Research Newsletter: July 20, 2006
Comparing Royalty and Advertising Rates in QSR and Casual Dining Systems
CASE STUDY: The head of Franchise Development at a growing franchise system had a problem. Prospective franchisees had been claiming that the fees required where too high. His team's numbers were below expectations and he had to defend their performance before the Board of Directors.
He wanted to be able to either show prospects that his system's fees were in line with others in his sector or make a recommendation to the Board that they change their rates. He needed to see the royalty and advertising fees for other systems like his, and he needed both to be able to analyze the data himself and to have a report from an objective 3rd party to show his directors.
FRANdata found 50 QSR and Casual Dining concepts with characteristics appropriate for comparing with his system. We provided our client with a spreadsheet with tables showing the royalty rates for each system, noting those with variable or sliding scale royalty as well as fixed rates. We were also able to provide advertising rate tables showing the fee requirements for local, national, or other advertising programs. Finally, we produced a formal report with charts and tables that highlighted for his Board where their fees were in relations to others in their sector.
The Outcome? Our client was able to arm his team with data they could give their prospects to show that the fees for their system were not only in line with their competitors, but were indeed lower than most. This growing system is expecting a strong second half of the year.
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Email Me or call me at 800.485.9570 with any questions about this or any research.
FRANdata is the most comprehensive data source on franchising. The team at FRANdata was both responsive and creative in meeting our specific needs. And they were easy and fun to work with.- Mark Doust, Consultant, Bain & Co.
95 New Franchise Concepts in 2nd Quarter
The New Concept Report (NCR) for the 2nd Quarter of 2006 is coming out this week and it identifies 95 new systems. While many are in food, the sectors with the largest number of new concepts are Real Estate Brokers and Business Consulting Services.
Read the Fact Sheet here
The NCR is popular with suppliers who want to reach emerging franchise systems from their start, as well as franchisors who need to keep track of their competition. To learn how to purchase individual reports or sign up for the quarterly subscription, visit our website.
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