Some entrepreneurs have used crowdfunding to open a franchise in their area. For instance, they may have started a crowdfunding campaign to raise money from their friends, family and members of their community to open a new franchise (like a McDonalds or Starbucks) in their hometown. Other entrepreneurs have used crowdfunding to launch their startup and then used franchising to sustain it. A company that is pursuing the latter approach is called Wheelys.
Wheelys offers a new platform to market coffee on the streets of any area that has a high amount of foot traffic – like popular tourist destinations or sporting venues. Think of it as a coffee brewing system on a bicycle, or a Starbucks on a food cart. The company uses crowdfunding to finance its cafés on wheels and also charges a monthly franchise fee to anyone that becomes a “wheeler.” This allows the company to sustain its brand after the crowdfunding campaign has finished.
Before proceeding with this type of business model you should be aware of any laws that may affect the business. In the case of Wheelys, one of the key considerations any operator must find out is whether they will need a license to operate in public areas. As noted on the Wheelys website, most places require a permit to operate this type of business and it’s up to the wheeler to contact the city council and learn about the applicable laws and fees.
In addition to local permits, countries like the United States have rules that govern the sales of franchises. This requires franchisors to provide franchisees with a disclosure document prior to selling them a franchise. As the rules vary by State and can be quite complicated, you should consult with an Attorney prior to selling any franchise.
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