Bidding for franchises: Zero-fee Franchises, Valued Franchises and Business Takeovers

Submitted by Lance on Mon, 09/01/2008 - 19:49.

Gogme Points System rewards points to site members and co-owners for participating in online activities. Points can be earned through submitting business ideas, participating in discussions, polls and other online activities. Reward points can be used to bid for business takeovers and franchises at reasonable costs.

Zero-fee Franchises

Zero-fee franchises are franchises that are awarded to co-owners through bidding with the use of reward points only. There will be no upfront franchise fee. Depending on the collective decisions made by co-owners, there may be yearly annual fee to maintain the franchise. These franchises are small businesses that need minimum startup capital. Co-created small business ventures that have simple business operations and can run independently with minimum assistance will fall into this category.

Valued Franchises

Valued franchises are franchises that are awarded to co-owners through bidding with the use of reward points at affordable cost. There will be upfront franchise fees determined by co-owners or third-party business valuators. Co-created business ventures that require significant investment in training, equipments and resources will be franchised to co-owners as valued franchises.

Business Takeovers

In the event that co-owners collectively decide that the business ventures should be sold, co-owners will be given priority to bid for such business opportunities. The business takeovers fees will be determined by co-owners or third-party business valuators.

Bidding for Franchises

The winning bid for franchises will be determined by reward points and not by the highest cash offers. There are two bid bonuses to increase the chance of winning the bid.

Bid Bonus 1: Idea contributor advantage

If the business venture was created based on your business idea, you have an added advantage during the bidding. You will receive +1 Bid Bonus during the bidding.

Bid Bonus 2: Premium co-owner advantage

Premium co-owner has a +0.5 Bid Bonus during the bidding.

Group Bidding

All premium co-owners can pooled their reward points and participate in the bidding as a group.

Bidding Examples

Example 1:

A co-owner submitting 1,000 Reward points for bidding with no bid bonus.

Reward points submitted = Rewards points submitted
= 1,000 points

Example 2:

A co-owner submitting 1,000 Reward points for bidding with Idea contributor advantage (Bid Bonus 1).

Reward points submitted = Rewards points submitted + (Bid Bonus 1 X Rewards points submitted)
= 1,000 + (1 X 1,000)
= 2,000 points


Example 3:

A co-owner submitting 1,000 Reward points for bidding with Premium co-owner advantage (Bid Bonus 2).

Reward points submitted = Rewards points submitted + (Bid Bonus 2 X Rewards points submitted)
= 1,000 + (0.5 X 1,000)
= 1,000 + 500
= 1,500 points

Example 4:

A co-owner submitting 1,000 Reward points for bidding with Idea contributor advantage (Bid Bonus 1) and Premium co-owner advantage (Bid Bonus 2).

Reward points submitted = Rewards points submitted + ([Bid Bonus 1 + Bid Bonus 2] X Rewards points submitted)
= 1,000 + ([1+0.5] X 1,000)
= 1,000 + ([1.5] X 1,000)
= 1,000 + 1,500
= 2,500 points