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Question 1. What is the difference between a dealership and
a franchise?
Answer 1.
Simply put, the first key difference between a
dealership (such as GO
MINI'S) and a franchise (such as PODS®) is
control. The GO MINI'S
dealership allows the individual dealers more flexibility than with a
franchise and better lends itself to business-minded entrepreneurs who want
to run their business with as little interference as possible from
“corporate.”
Most franchises are governed
by an elaborate, lengthy franchise agreement that sets out what the
franchisee may or may not do. For example, a franchisor may require the
franchisee to reach revenue goals and sales quotas. If these goals are not
met to the satisfaction of the franchisor, the franchise agreement may give
the franchisor the right to terminate the franchise and also charge a
termination fee! The franchisor may also set mandatory advertising budgets
and charge advertising fees if it employs a national advertising campaign.
The
GO MINI'S
dealership model does not set any revenue
goals, impose any minimum advertising budgets, or require an royalty fees.
As a
GO MINI'S
dealer, you can establish your own pricing
based on local market conditions and competition, and you can set your own
advertising budget.
The second key difference
between a
GO MINI'S
dealership and a
franchise is the lack of any on-going fees. Most, if not all, franchises
have royalty fees. A typical franchisor in the mobile storage industry
averages between 8% to12% of the gross monthly sales from its franchisee.
Not having these fees allows you to put more of what you earn in your
pocket. If you have annual gross sales of $500,000, you could save as much
as $50,000 annually compared to a franchise with similar gross sales. |
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