Is Starting A Franchise Affordable?

Before investing in a particular franchise network, carefully consider how much money you have to invest, your abilities and your desired goals. You can also browse our ”>low cost franchises . The following checklist may help you make your decision: What is the initial investment ? How much up front cash will I need to put down? How much money do you have to invest? Will you pursue the franchise by yourself, or with partners? Will you need financing and where can you obtain it? Do you have a favorable credit rating? Do you have savings or additional income to live on while starting your franchise?

Is Owning A Franchise Profitable?

Although the success rate for franchise-owned business is generally better than the success rate for many independent businesses , there is no formula to guarantee success. The same may also be said of the profits generated. Often the margins you make are a reflection of your ability to properly run your franchise, however you may be able to get a document (Item 19 of the Franchise Disclosure Document) from the franchisor that illustrates the typical franchise earnings. If the franchisor does not provide such a document, you should contact a number of franchisees in the market you are interested in and seek their advice on the business' profitability. One bad apple does not mean the concept is flawed, so be sure to speak with at least five franchisees.

How Do I Finance A Franchise?

While there are franchisors that do assist in franchise financing, others do not. This will vary from franchisor to franchisor. Seek the financing options offered by the franchisor but also consider friends, family, investors, the Small Business Administration (SBA) and if you have a relationship with your local bank, certainly deem it as an option as well. Additionally, Franchise Opportunities offers a Finance Center with lenders who want to help.

What Are The Advantages Of Owning A Franchise?

Franchising has many advantages . A franchise is already a functioning business system. While entrepreneurs invest heavily in order to set up a profitable business model, a franchisee can step in to an already established concept, with much less risk for failure. For example, are you aware that as many as 80% of new business start-ups fail each year? An already functioning business model will put you heads and shoulders above the novice entrepreneur who not only needs to generate profits, but also needs to develop a profitable business model. For instance, fast food franchises greatly benefit from their association with the brand name and products of the franchisor. It can take much time and be very challenging for an individual business owner to establish his business with the same brand recognition and popularity as an existing successful franchise system.

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