The Right Franchise For Your Lifestyle

Buying a franchise has many benefits to offer but it is important to understand the difference in benefits while weighing the opportunity costs.

The most important factor to consider is the financial obligation you a new business owner are able or willing to take on.. Many first time buyers do not take into considerations many of the hidden costs associated with being a franchise owner.

Most franchises have a franchise fee which can be as little at $1,000/month or as high as $30,000/month. This fee covers national marketing campaigns, access to the franchise logo, brand image, and training. Real estate financing is the second biggest factor when considering franchise opportunities. Franchises such as restaurants for sale and car dealerships for sale require commercial real estate that must be acquired by you. You will need to sign a lease or purchase the property. Although, the franchise will help negotiate favorable terms, it is still the sole responsibility of the new franchisor to meet the obligations of the lease or mortgage. One way of looking at this is simply thinking of this as an additional mortgage; therefore, ask yourself will the franchise net enough to play for this mortgage?

The second factor to consider is the amount of time you have available to invest. How many hours a week do you spend with your family and friends? Do you spend additional hours at work? Are you willing to give up some or all of that time to focus on your business? Although, the corporate office of the franchise will handle all the national marketing, you must actively oversee the local marketing. As the owner you also need to handle day to day operations. You can hire a manager and additional employees to do the actual work but you must analyze the activities to see if they are effective. As the owner, you must also actively plan for the future of the business. If business oversight is not handled properly, the business most likely will not be as profitable as it is suppose to be.

The third factor you must take into consideration when evaluating which franchise to purchase is, how much control the corporate office has over the individual franchises. Many of the larger franchises have requirements that individual franchises must meet, which includes everything from the uniforms employees wear to the placement of the logo on the door. This is an important thing to review during the evaluation process because many first time franchise owners get frustrated once they realize they have very little say in the overall look and operation of their business. In contrast, if you are purchasing your first business, you might appreciate the guidance, in the process of learning, you will receive from the franchise corporate office.

by: Sweta Shah

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