When you decide to take up a franchise opportunity you will need to invest two things into your business; firstly, commitment and effort that will allow you to drive the business forward and, secondly, the financial investment that will get the business off on a sound footing.
The first element of this financial investment is the Initial Franchise Fee and typically forms the largest part of the total investment required. The FVF Franchise Fee is £17,500 + VAT. However, you will also need some additional working capital to fund the business over its early months when the foundations of the business are being structured.
The Initial Franchise Fee is designed to cover the franchisor’s costs in helping you set up your business and includes the following:
The Licence that gives you the right to use the FVF trading name (the Brand) and the operating system that has been developed
- Training in all aspects of the system. This will include training in all the compliancy issues that will allow you to operate as an Approved Representative under the FCA regulations, training in the processes of responding to customers’ enquiries and administration of the funding activity
- Onboarding and approval with the FCA
- Three month’s Launch Marketing through Search Engine Optimisation form the FVF provider. You can continue to work with this provider or choose another, but it will be important to continue to invest in SEO after this paid-for initial period
- First Year’s Membership fees of BVRLA
- Computer terminal for use with the system requirements
- VOIP Telephone system, which is required so that all customer calls are recorded through the FVF system for FCA monitoring purposes
- Software system set-up and First year fees for licences including the Domain Name licence
- Business Stationery – Business Cards, Letterheads, Compliment Slips etc
- Business Planning Support
- Accommodation costs during the training period at FVF Head Office
Set-up Costs that are not covered by the Initial Franchise Fee
- Legal and Professional Fees associated with setting up the business and due diligence on the Franchise Agreement
- Office set-up, Desk, Filing Cabinet etc
- Data Protection Registration
You are likely to need additional finance of £7,000 to fund the start-up period.
The total initial investment requirement is, therefore, likely to be in the region of £28,000 but this will be confirmed in more detail when your Business Plan has been drawn up. We have good relationships with potential funders if you need to borrow part of the funds, but you should be aware that most of the banks will only lend on a 50/50 basis – that is to say, they will match whatever funding you have available.
Some of this funding is taken up by the VAT amount added to the Initial Franchise Fee and other expenditure. However, once you have registered for VAT this is can be reclaimed on your first VAT return.