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How Much Money Can You Make as a Franchisee? Minnesota

When investigating a franchise opportunity one of the most difficult pieces of information to get from the franchisor is how much money you might make. This may be frustrating because you are not going to invest in a business until you have a good idea of what you can earn. In most cases the franchisor is not being purposely difficult. The Federal Trade Commission (F.T.C.) and many states have stringent regulations as to how franchisors can provide this information to prospective franchisees. However, there are ways to get this essential information.

1. Local Companies

2. Why is the government regulating franchisors?

3. Why don’t all franchisors provide this information?

4. Where else can you find this information?

5. Featured Local Company

1. Local Companies

Hellmuth & Johnson, PLLC
952-941-4005
10400 Viking Drive, Ste 500
Eden Prairie, MN

MergerPlace
952-401-0677 ext 102
5720 Green Circle Dr. #100
Minnetonka, MN

Cross USA
(218) 837-6114
Sebeka, MN

Cross USA
(952) 432-3775
13754 Frontier Ct Ste 106
Burnsville, MN

Central Consulting Group
(952) 891-5710
6781 129th St W
Saint Paul, MN

Cross USA
(218) 837-6260
Sebeka, MN

Novus Windshield Repair
(952) 944-8000
12800 Highway 13 S
Savage, MN

Franchise Masters
(763) 541-1385
8301 Golden Valley Rd Ste 240
Minneapolis, MN

Summit Consulting Group the
(651) 646-2555
1211 Portland Ave
Saint Paul, MN

Johnson & Associates Consulting
(651) 774-5843
1396 White Bear Ave N
Saint Paul, MN

2. Why is the government regulating franchisors?

Early in U.S. franchising history there were many instances of abuse, particularly where unjustified or misleading earnings claims were used to sell franchises. In 1979 Congress passed legislation authorizing the F.T.C. to regulate the franchise industry to try to stop any such bad practices. A number of states also passed similar legislation. The current F.T.C. and state rules do not forbid a franchise company from supplying information about the earnings that can be achieved in their business. They do, however, regulate how this information can be given to a prospective franchisee.

A franchise that wants to provide earnings claims must put it in writing in their UFOC disclosure document. Also, it is essential for the franchisor to make sure that the data provided is accurate and not misleading and they need to clearly label any assumptions or qualifications on the data provided.

Assuming they meet the legal requirements, a franchisor is free to provide whatever earnings information they want to a perspective franchisee in terms of sales, expenses, cash flow and income.

3. Why don’t all franchisors provide this information?

It sounds relatively simple but there are still many franchisors that don’t provide earnings claims. There are two likely reasons: First, producing an earnings claim does involve effort and expense for the franchisor. Second, the results may not be attractive enough to assist in the recruiting of new franchisees.

4. Where else can you find this information?

If a franchise does not provide an earnings claim in their UFOC, the best source of information to find out how much money you might make is the existing franchisees of the system. Call them and ask. Item 20 of the UFOC provides a list of current and former franchisees along with their contact information. You will be talking to many franchisees anyway as part of your due diligence so make sure you also cover the subject of the averages and ranges for earnings in the system. By gathering actual performance statistics, you will have a realistic starting point in determining how much you can expect to make in a similar business.

5. Featured Local Company

Hellmuth & Johnson, PLLC

952-941-4005
10400 Viking Drive, Ste 500
Eden Prairie, MN
http://www.hjlawfirm.com

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How Much Money Can You Make as a Franchisee? Minnesota

1. Local Companies

2. Why is the government regulating franchisors?

3. Why don’t all franchisors provide this information?

4. Where else can you find this information?

5. Featured Local Company