Buying a franchise can be a great option for those who are looking to start their own business. Something any potential business owner needs to realize is that in terms of the time and money you will spend, buying and owning a franchise will be just as much work as starting a business on your own.
What are the major expenses involved in starting a franchise?
The first cost you will incur will likely be the franchise fee. Franchises charge this upfront fee as a way of recouping the costs of training, branding, and the support they will provide. The average franchise fee is somewhere in the neighborhood of $30,000, but they can range from less than $10,000 to over $100,000. The franchise fee will depend on the size of the franchise you are buying into, and each individual franchise will have specific requirements to become part of the brand.
There may also be costs related to setting up a location. You may have rent payments and may have to pay for things like landscaping. You may need to have signs made, install new equipment and fixtures, buy new furnishings, and build-out a space.
Any new business will also need to bring in an initial inventory and purchase supplies. There may also be operational costs like advertising and payroll, so you will need to be certain that after all the initial expenses are covered, there is still enough capital left to cover your additional expenses until you are able to turn a profit.
How can you be sure that you have enough to get your franchise up and running and keep it running until a profit starts coming in? Ask questions, lots of questions, during the buying process. You will need to have at least a general idea of how much time per week you will need to work, and how much income you can expect to bring in if all goes well.
Does buying a franchise seem like the right path for you, but you have additional questions? Leave a question or comment here and we will be happy to help.
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