Risk Score
Pending analysis
Investment Range
$87,042 - $112,527
Franchise Fee
$15,000
Min Cash Required
$100,000
Total US Locations
62
Business Summary
FranNet Businesses offer specialized franchise consulting services to franchisors, potential franchisors, licensors, and other business opportunity companies. FranNet assists these companies with the sale or resale of their franchises, licenses, and business opportunities.
Corporate History
The FranNet system began in 1987 when its founder, Howard Bassuk, started offering franchise consulting services through his company, Hobassco, Inc. Over time, the rights to the 'FranNet' name were transferred to Franchise Network Mutual Benefit Corporation in 1999, and then the rights for office network growth were assigned to FranNet Development Group, LLC in 2001. FranNet, LLC, the current franchisor, was formed in New Jersey in October 2006. It officially began franchising in January 2010, after FranNet Franchising, LLC (which had offered franchises from 2006-2009) merged into FranNet, LLC, with FranNet, LLC assuming all assets and liabilities.
Financial Overview
Investment Range
$87,042 - $112,527
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$25,000
Minimum Cash Required
$100,000
Equipment Costs (Low)
$2,500
Equipment Costs (High)
$5,000
Working Capital
$65,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
FranNet experienced a significant net loss of $(1,588,908) in 2024, a notable change from a net income of $53,660 in 2023. This was largely influenced by a decrease in contract revenue and a substantial loss of $(830,235) from the disposal of an asset in 2024. Consequently, FranNet utilized cash from operating activities in 2024, in contrast to generating cash in 2023. Additionally, the company ceased operations of its subsidiary, ZorNetwork, LLC, during 2024. While the auditors issued an unqualified opinion on the financial statements, indicating fair presentation, the financial performance in 2024 shows a significant decline compared to the previous year.
Financing Details
FranNet does not offer any direct or indirect financing to its franchisees. FranNet also does not guarantee any notes, leases, or other obligations for its franchisees.
Performance Metrics
Total US Locations
62
Franchised Units
62
Corporate Units
0
Franchising Since
2010
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
FranNet has had one past lawsuit. This case, Edward T. Bower, et al vs. Zounds Hearing Franchising, LLC, et al, was filed in Ohio around May 2016. The lawsuit alleged violations of Ohio's Business Opportunity Statute and fraud, purportedly committed by Zounds Hearing Franchising, LLC and several FranNet franchisees. FranNet and its franchisees denied the allegations. The case was settled with FranNet and one of its franchisees collectively paying $28,000, and mutual releases were executed by all parties. This case is now closed.
Bankruptcy History
FranNet has no bankruptcy history to report for itself or its key personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise, FranNet franchisees must have complied with their Franchise Agreement and not had any bona fide defaults for the last two years of the initial term. They must also sign FranNet's then-current Franchise Agreement and any related agreements, which may include materially different terms. Franchisees are required to sign a general release of all claims against FranNet, pay a successor franchise fee, and request the successor franchise between 60 and 180 days before the end of the current term.
Training & Support Program
Franchisor Assistance
Before opening, FranNet provides franchisees with confidential Operations Brand Standards Manuals and an initial training program. FranNet also provides specifications for the use of its proprietary Marks. FranNet does not assist with site selection or providing initial inventory. After opening, FranNet offers ongoing guidance and assistance in marketing services, information about franchisors, general operating procedures, and changes to the system, delivered through manuals, bulletins, reports, email, and phone consultations. FranNet pays commissions to franchisees and provides continuing training sessions. FranNet also administers a Marketing Program through a Franchise Advisory Council, which generates leads, conducts public relations, search engine optimization, website maintenance, and other promotional activities. Franchisees are also provided with a required computer system, including a designated vendor for customer relationship management software (MyFranNet.com) for email marketing, forms, templates, training materials, and access to the FranNet IntraNet and ZoHo Dashboard.
Initial Training Hours
66
Training Location
Hybrid (virtual via Google Meet and in-person at Bee Cave, Texas, or other designated location)
Ongoing Support
After opening, FranNet provides ongoing guidance and assistance on marketing services, information about franchisors, general operating procedures, and system changes, which is delivered through manuals, bulletins, reports, email, and phone consultations. FranNet also provides continuing training sessions and requires franchisees to attend at least one FranNet National Meeting annually. Additionally, franchisees utilize the MyFranNet.com customer relationship management software for ongoing operations, including email marketing, access to forms, templates, training materials, the FranNet IntraNet system, and the ZoHo Dashboard.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Home-Based
Owner Participation
hands-on
Territory Type
Non-Exclusive
Staffing Notes
FranNet requires that the franchisee or one of their principals who has completed the initial training program must personally participate in the direct operation of the FranNet Business as the supervisor and manager. Any additional sales personnel, employees, or independent contractors hired or engaged by the franchisee whose responsibilities include communicating with prospects must also be approved by FranNet, complete FranNet's initial training program to its satisfaction, comply with all professional standards, and enter into a written agreement protecting FranNet's confidential information. An on-premises supervisor must successfully complete the initial training program. Managers and employees with access to confidential information must sign non-competition and confidentiality covenants, and return proprietary materials upon leaving employment.