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Buying Guide for Business Franchises
Introduction
Buying a franchise license will start you on a path to running your own business. The franchise you start is a family affair that your children can be involved in, and franchises help you use the stature of an established business to create your own. You are operating under someone else's household name, but your business savvy will help you turn your location into a success.
You cannot apply your business savvy to any franchise location without first making a purchase, and this buyer's guide will help you make a wise decision. Take each section of this article to heart before buying a franchise, and you will find the franchise that is worth your money. You are making a long-term investment in the financial security of your family, and you must make such a decision with wisdom.
Benefits and Drawbacks
Owning a franchised business has its benefits and drawbacks. You have to consider each pro and con before buying a franchise license, and you have to plan to overcome the drawbacks of the business once you begin operation. You are purchasing a business you may run yourself with the help of a large corporation, and the business is partially funded by the corporate office. You are selling products or services people know, and you are standing on the shoulders of the company's reputation.
A large company spends millions of dollars every year marketing the products you sell, and you reap the benefits every day in your store. You are offered marketing assistance in your community, and you receive the bulk of the profits every month. Owning a franchise can be quite rewarding, but there are drawbacks to remember.
You are expected to spend a good bit of your time inside the store, and the business requires your full attention. Every employee works directly under you, and accounting for your business lands on your desk every day. You will work long hours in the beginning, and you will have a full work schedule every week for the foreseeable future. Franchise owners do not leave their franchises in the hands of others, and it could be many years before your children can take over the family business.
The Cost of a Franchise
You have to pay a franchise fee to the corporate office, and you may need a loan to finance the franchise fee. Usually it is $20,000 to $30,000. For some franchise you have to find a location for your store, and you have to pay fees for marketing, construction, uniforms and products. You can invest your profits back into the business while you operate, but there are many costs when you get started. A large loan to pay for your franchise will pay for itself, but you must secure a loan before you get started.
You will pay your employees every week, and you have to make contributions to insurance plans for employees who are eligible. Every cost has to be covered, and you have to be prepared to use your profits to pay for everyone you employee. Fees for construction and re-imaging have to be paid from your profits, and you may be asked to upgrade the infrastructure of your location at any time.
Using a Broker or Consultant
A broker or business consultant will help you negotiate a deal with a large corporation for a new franchise. Brokers will help you find a location for your business, negotiate your contract and reduce your franchise fee. You may purchase more than one franchise at a time, and a broker will help you get a discount on the franchise fees you are expected to pay.
A business consultant can stay on when you open your business, and you will get accounting advice when needed. Search for brokers with a proven track record in your area, and do not attempt to purchase your franchise alone. Franchise owners can get in over their heads quickly without assistance.
Buying Tips
You have to purchase franchises in a business you enjoy. Purchase a franchise in a restaurant you love to eat at, or you purchase a franchise from a company you love to shop with. Your enthusiasm is infectious to your employees, and you will not lose your desire to go to work in the morning. Franchise owners who love their businesses are more likely to succeed, and your employees are more likely to stay with you for a long time.
The Conclusion
Purchasing a franchise in a large corporation is not a step for the faint of heart, but you may purchase a franchise with wisdom. This article explains how to go about purchasing your franchise with wisdom, and your own research will help you choose a company that is worth doing business with. You and your family will depend on the franchise for income, and you may pass the family business on to your children one day.