Franchise Times: Wireless Zone Utilizing Royalty Fee Structure to Enhance Franchise Development

As the franchise industry gets increasingly competitive to land qualified, experienced multi-unit prospects, many brands are rethinking their strategy when it comes to royalty fees in order to modernize and make their brands more attractive.

According to an article in the May issue of Franchise Times, 355 new concepts are projected to join the franchise fray in 2016, up more than 100 over the number of new concepts five years ago - and brands like Wireless Zone are utilizing the royalty fee structure as a way to improve their brand's offering.

"Our only interest at the store level was driving commissions and I didn’t think that was right,” Joe Johnson, CEO of the nearly 400 unit Verizon retail franchise Wireless Zone, told Franchise Times. “The retail locations are a lot more holistic than just the commission on the sale of a device, and I wanted to make sure my operation had the proper incentives in place to drive store-level profitability.”

Johnson rounded up a group of franchisees in the system to work through a process to put a new royalty fee model in place. The team hashed out several ideas before landing on a revolutionary new model which 90 percent of the franchisees have adopted. Store-level sales in January were up six percent over January of 2015.