Franchisor Incentives Continue

To offset the crisis of confidence in today's economy, franchisors are offering discounts, money-back guarantees, and other financial incentives and stimuli to help interested franchise prospects take the final step to franchise ownership. As with any prospective franchise purchase, read the FDD for full details. As one franchisor noted on its website promoting its offer: "Of course, conditions apply." Recent offers include the following:

Papa John's--No Franchise Fee

Tied to its 25th anniversary, "Papa" John Schnatter is offering aspiring and existing franchisees an offer he hopes they can't refuse: 1) no franchise fee ($25,000 value); 2) no royalty for 12 months; and 3) a $10,000 early opening award. The 25th Anniversary Development Incentive Program is valid for all approved franchisees who sign a development agreement before Dec. 27, 2009. "We see the current economy as an opportunity for growth," says Jude Thompson, Papa John's president and COO. "We know we have a franchise model that works, and we are excited to launch this new incentive program to potential business owners."

Café2U--Acceleration Package

With more than 80 franchises in Australia and nearly 50 in the U.K., this mobile coffee concept is promoting an Acceleration Package to ensure new franchisees hit the ground running from day one. "We guarantee that from the first day of trading, they will be taking home $500 a day for the next two weeks," said Andy Simpkin, CEO of Café2U. The Acceleration Package takes four weeks: one week with a franchisee development manager, one in the classroom, and two in the new franchisee's territory. Cafe2U also provides an income guarantee for the first two weeks, with a daily business schedule constructed with the assistance of a franchisee development manager. "We have brought in three highly experienced franchisee development managers who specialize in generating new business in tandem with the new franchisee," said Simpkin.

Kitchen Tune-Up--Sign Now, Pay Later (or not)

This national kitchen remodeling franchisor, with more than 120 franchisees in the U.S. and Canada, just made system entry $45,000 cheaper for candidates through its Deferred Payment Plan/Lease to Buy offer. The plan defers $45,000 of the $65,000 up-front investment for three years for the first 25 people that commit in 36 selected states. To further sweeten the deal: If, after three years, the franchisee feels that Kitchen Tune-Up isn't for them, they can walk away, no questions asked. If they decide to continue at that point, they are responsible for paying the $45,000.

Discover Rental Purchase--Happiness Guarantee

Sign up as a Discover Rental franchisee and take a year to decide if you want to give it back. According to its new Happiness Guarantee, "If after twelve months our Discover franchisee is not completely happy--for any reason--we will refund the franchise fee, purchase all equipment, signage, company vehicles, and rental agreements," said Jim Steger, VP of franchise development. In most cases, the franchisor says, it also will assume lease agreements.

Red Mango--Red's Real Deal

Six months or less into your Red Mango store and want out? Under its Red's Real Deal incentive program, the franchisor will buy out a new franchisee's store for up to $275,000 and take over the location if the franchisee if not satisfied with the investment within the first six months of opening. (Estimated initial investment is $261,100 to $437,600.) Under the program, Red Mango will also reduce its $35,000 franchise fee for the first unit by $10,000 (second units already are $25,000) and contribute $10,000 toward grand opening marketing. Red's Real Deal is available in 25 states.

Published: June 29th, 2009

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