Clients of ours frequently have unconventional ideas for franchises – many of which don’t even see the light of day. But Wisconsin-based Fireline Shooting & Training is an example of one unique franchise that has found a foothold in the market and is now expanding.

Fireline offers franchises for shooting sports centers that feature indoor ranges, training centers and a retail store component selling firearms and related accessories, ammunition and reloading equipment. The company opened its first location in Rice Lake, Wis. in the winter of 2015 and their second location in Grand Chute, Wis. in the fall of 2016. This year, they made the leap to franchising.

The Fireline model is very different than their traditional competitors. The company has taken the gun range, something that was typically found only in large spaces in rural and industrial settings, and brought it into strip malls and similar settings that require less space and less cost, and are more convenient for the customer. As a result, in contrast to the traditional shooting ranges that attract predominantly adult males, Fireline’s model and neighborhood locations also attracts women and families who want to visit their local shooting center, either as an entertainment destination option, or in combination with their other local retail visits.

Leaders within the company carved their market niche by tailoring their products and services to the needs of their customers. Fireline provides education, training and shooting range facilities for continued practice, while also carrying a carefully selected range of shooting sports products and accessories. All of this is combined with the idea that the customer service experience should be tailored to each customer.

Creating a successful startup franchise out of an unconventional concept is definitely not a sure thing. But, with the right planning, the right execution and help from an experienced advisor, some outside shots can pay off. It seems to be doing so for this non-traditional concept. For information about Fireline and their franchise program, contact John LaBonte, CEO of Fireline Range Development, LLC at john@firelinestc.com.

This is an age-old question for new franchise systems. Should I hire a full-time salesperson, should I hire a franchise broker or should I sell my franchises myself?

In our experience, in the first year of the life of a new franchisor, there is nobody better to sell the franchise than the founder of the company. There are lead-generation firms that can help you generate leads, but most start-up franchisors have a pipeline of people who have asked them about franchising. You know your business better than anyone else, and you are the best one to explain that business to prospective franchisees, and just as importantly, determine whether the prospect is likely to follow your system and be successful in the business.

It is critical to a startup franchisor that its first franchisees are successful as they serve as your references, good or bad, to future franchise prospects. You also have to work with the people to whom you sell your franchise on a regular basis, and you will likely be more selective than a commissioned salesperson. If selling franchises is not your forte, see if there are others among your existing staff who have the skills to either make the initial offering, bringing you in to close the sale, or to close the sale after you have explained the opportunity to prospective franchisees.

Selling franchises takes time. It involves sorting through leads who have no financial wherewithal to start a business and people who seem to be “professional shoppers” and not “buyers.” It will take you away from your existing business. It is not something the founder or entrepreneur should be doing forever, but, it is our experience in the early stages of the life of a franchise company, that the founders must be involved in the sale of franchises as they are the ones who have to live with the results of these efforts.

There are a lot of mistakes one can make when initially franchising a business, from trying to copy documents used by others (that may not work for you at all), to not being prepared to offer proper support to franchisees. However, the biggest mistake a start-up franchisor can make is in its initial selection of franchisees. Particularly when the franchisor is strapped for cash, it is too easy to use the “mirror test” in selecting franchisees – if they have the money, and can fog the mirror, you take them.

It is critical that your first franchisees reflect the type of franchisee you want in your system. Are they prepared to follow the system? Do they have the proper skill set to be successful in the business, whether that means a cheerful personality, a true passion for your brand, or technical skills required for the business? (The best answer is “all of these.”) Do they have the time and resources to devote to the business?

When you get beyond your first year in franchising, you will be listing your initial franchisees in your franchise disclosure document. If you want to show prospects the kind of money they can make in the business, you will also need to use results from your early franchisees. If these early franchisees are not successful, they will not validate your system and it will be very difficult to overcome these failures. Perhaps even worse, if they are litigious, you will spend the next few years with lawyers and in courtrooms, an expensive and time consuming proposition, rather than growing your business. For these reasons, it is critical that you do your due diligence on prospective franchisees and satisfy yourself not just that they have an interest in your brand, or can “fog the mirror,” but that they will be a “fit” for your system and likely be successful.

One of the questions we receive most often from entrepreneurs seeking to franchise their business is how to price their franchise. Most franchisors receive an initial franchise fee, and an ongoing royalty, but how do you determine the amount of these fees? There is no easy answer to this question; and it is more of an art than a science.

Start Low

For the initial fee, many startup franchisors make the mistake of setting too high a fee. They see that a mature franchisor in their space charges $35,000 for an initial franchise fee, so they decide to “discount” their fee to $30,000. However, what do franchisees get for this fee? How much does it cost you to provide initial services to your franchisees? Our recommendation to our clients is that when they first start franchising, they set their initial franchise fees on the low side. It has always been my feeling that if I could put 100 people in a room, and instantly have them all sold, trained and open for business, with no cost to me, I would give away the initial franchise fee. The point is that you will not make money on your initial fee, at least not in the early years. Rather, you want to find good prospects who will open your first franchises, be able to vouch for the concept, and pay you royalties over the years. If you can “break even” on the initial fee, and get a good franchisee open in a prime location, you have done well. If that means pricing the initial fee too low, you are leaving very little money on the table, compared to the ongoing royalties you will receive over the life of the franchise, and you are creating “raving fans” for your brand. Perhaps more importantly, it is more palatable to your early franchisees to learn that they paid less than franchisees pay today, than to learn that they paid more and you are now discounting the product.

Royalties

In terms of your ongoing royalty, you need to have a high enough fee to operate your business and earn a reasonable profit. At the same time, your franchisees need to be able to pay your fee, and earn a profit from their business. The rule of thumb we give to our clients is that if at the end of the day your royalties equal between 1/4 and 1/3 of your franchisees’ bottom lines, meaning that for every royalty dollar that franchisees pay you, they will be able to pay themselves two dollars or three dollars – you will have happy franchisees. That is not to say that your royalties should be set as a percentage of a franchisee’s profits, but you should do some financial modeling, determine a typical bottom line for a franchisee, and set your royalty based on a percentage of sales that will net you 1/4 to 1/3 of their bottom line. If that gives you the profit you need, you have a good business model, but if you need to take as much or more from each franchised outlet than the franchisee typically pays himself, the model will not stand the test of time.

For guidance on what other franchisors charge, check out the January issue of Entrepreneur Magazine. Every year, they have a listing of more than 1,000 franchises, showing the initial fees, ongoing royalties and advertising/marketing fees those franchisors charge to their franchisees. This will not tell you what franchisees receive for their money, and it will not necessarily include all fees the franchisor collects, but it will give you an idea of what others in your space are charging.