Every year, millions of people decide to take the plunge and enter the franchising world. After all, it’s an excellent way to own a business, be your own boss, and gain financial independence. It’s a decision that shouldn’t be taken lightly and certainly one that shouldn’t be rushed. People don’t plan to fail, they fail to plan, and these are some of the common items that get overlooked when people enter the franchising world.
While location is the cardinal rule in the world of real estate, it also applies to the world of franchising. Choosing the perfect location for a franchise is something that should never be overlooked. Depending on what products and services you’re selling, you should think carefully about whether or not your intended demographic has direct access to your location. You should also consider the other businesses that will be operating around you and if you have the capacity to compete.
Another expression that applies to the world of franchising is “Don’t count your chickens before they’ve hatched.” When you’re looking at a potential franchise to invest in, you should do your research in terms of what the average profit for the business is. This will allow you to gauge what your intake and profits are. If the franchisor doesn’t want to share this information with you, it’s a red flag, and you should be wary about proceeding any further.
Completed Investment Cost
Much like any transaction that will majorly impact you and how you live your life, you should always read the fine print of your franchise agreement. While you might already be aware of the fee you’re paying for using the franchisor’s intellectual property, hidden fees can come out of nowhere. Just remember to exercise caution before you sign.
Costs to Maintain
No matter how much profit a franchise has the potential to generate while it’s operating, you have to spend money to make money. Knowing how much supplies, rent, and other costs will be before you enter an agreement is essential. Ask to see the difference between profits and sustaining costs of other locations. This information will allow you to plan more effectively.
While the world of franchising can be very exciting, it can also seem intimidating for those who are looking to get started. We’ll help guide you through any questions and concerns you might have. Give our Franocity team a call at 561-609-6200 for more information.