So you’re considering leaving your boring 9 to 5 job and investing your savings into something that could well provide you with a secure source of income for many years to come. Well, good for you. The only problem you’ve got is deciding on the best, most effective way of ensuring a substantial return, but don’t worry too much, this is what franchises were designed to do.
If you decide to invest in a franchise business you’ll save yourself a lot of hassle, as this removes the need for you to come up with a great idea. That said, don’t simply walk blindly into a deal because some franchises do far better than others. Still, presuming you’ve already done a little bit of research and now understand how the whole system operates, you should find the information below very useful.
Here are the top 7 things you need to know:
1. Upfront Cost: This should be pretty obvious, but i’ll say it anyway. Understanding the full costs involved with any franchise you buy is essential. Whether you purchase a fast food restaurant or even invest in a business coaching franchise, ensuring you’ve factored in all the costs will provide you with the best chance of long term success.
2. Consider Any Restrictions: Make sure you read through all contracts thoroughly, as some franchise sellers will demand you use certain suppliers for the goods or services you offer, and this can sometimes mean paying considerably more for products than you might otherwise do if you sourced the materials using alternative methods.
3. Ask About Guarantees: This can be very important, especially if you purchase a relatively popular franchise. The last thing you need is for the seller to make deals with other people in your area, as an identical business opening up on your doorstep will cause significant problems as i’m sure you can imagine.
4. Decide If It’s Scaleable: When buying a franchise it’s not a very good idea to only consider the wages you will be able to take from the business. You also want to ensure that there is plenty of room for growth, as this is where your profit lays when it comes to reselling.
5. Research The Seller: It shouldn’t be too difficult for you to find out how many franchises a seller has sold over the last few years, and how many have failed. Ensure you do this before signing any contracts and you should have a better idea about the challenge you face, and the chances of success.
6. Look At Resale Values: Unless you’re taking a drastic risk by purchasing a brand new franchise, you should be able to find out how much previous owners have sold their businesses for. This will give you an idea about how scalable it is and if you can expect to see a large profit.
7. Ensure The Seller Includes A Get-Out Clause: You need to have the option to sell your business if it doesn’t make any money. Some sellers will insist that you go down with the ship, but this obviously isn’t in your benefit. So, read the small print and see what the current contract offers. If it isn’t good enough, demand a change or walk away.
Good luck my friends!
