New Management Service Fee Structure Equals More Profit – and Bigger Smiles – for Kitchen Facelift Franchisees

 

Dream Doors, the UK’s largest kitchen facelift franchise, has announced a radical realignment of its Management Service (MS) fee. In a move that will encourage sales, the MS fee has been staggered to reward high turnover.

 

Says Dream Doors’ founder and Managing Director, Troy Tappenden: “This new deal adds thousandsof pounds to our top performing franchisees’ bottom line. Those who continue to push themselves each year, and help Dream Doors to grow more rapidly, could see a 20 percent increase in their profits as a result of the new initiative. The move is a huge incentive for  our existing franchisees, and will also encourage new franchisees to join Dream Doors. For many, this is the icing on the cake!”

 

Already, six well-seasoned Dream Doors franchisees – ones who have been with the company for several years – have surpassed the £400,000 mark and are benefiting from the new scheme.

Confirms Tappenden: “Dream Doors’ current MS fee is calculated as a percentage of a franchisee’s turnover. For those that sell up to £275,000 of kitchens and kitchen facelifts, the fee is set at 9.2 percent. Once this first benchmark is hit, the fee automatically drops down to 6.2 percent of turnover secured over £275,000. On sales of more than £400,000, the fee plunges to a mere 4.2 percent, well below the current market average of 12 percent for most franchises.

He adds: “The 9.2 percent MS fee had been fixed for many years. Today we feel the new staggered arrangement offers the best deal for all our franchisees – it’s a much fairer, more incentivised system that has gained wide support from the network. Experienced franchisees are more motivated than ever, and we still have all the resources we need to sustain our award-winning training capabilities, and support system – particularly for new entrants.”

 

Dream Doors’ staggered MS fee deal starts on January 1st each year to encourage franchisees to hit higher targets before the end of the financial year, and so benefit from the reduced MS payments.

 

Says Dream Doors’ Operations Director, and bfa Regional Chair, Kelly Chambers: “In franchising, the MS fee is there to ensure franchisees get the right level of backup they need. It also provides franchisors with a vital revenue stream to invest in marketing the brand, growing the franchise network, and providing training and support for all franchisees. We spend hundreds of thousands of pounds each year on these things. Without the MS fee, it simply wouldn’t be possible to sustain a brand the size and scale of Dream Doors.”

 

She adds: “Lowering the fee for increased turnover could be seen as a risky strategy, but we’re confident the net income to Dream Doors will be more or less the same. Ultimately, it will encourage those franchisees that are happy with a turnover that sits around the mid £300,000 mark to push that little bit harder and break through the £400,000 barrier. Doing that will make their businesses more profitable, secure more revenue for Dream Doors as a brand, and help fund further developments within the business.”