FRANCHISE OPPORTUNITIES

New Developments & Franchise Business Opportunities

What to Consider When Choosing a Franchise Opportunity

When searching for the right franchise opportunities, most people will start with a pre-conceived notion of what they want to do. As an example, if someone really loves pizza, they may start their search by investigating several different pizza franchise opportunities.  When searching for a franchise opportunity it is imperative that you take the time to analyze four key items that will increase your chances of success.

Experience

Having experience in the same industry as the franchise opportunity that you choose will give you a great advantage. It provides you with insight that allows you to understand the products or services, the customer base, and greatly reduces your learning curve.

When looking at a specific brand for a franchise business opportunity, you should also consider your experience managing employees. If you have never managed people before, you may not want to jump into a franchise opportunity that requires a large staff. The time you will spend to learn the task of managing your employees will greatly reduce the amount of time you can give to the business operation.

Lastly, you should also consider your level of experience operating a business. If this is your first time, you should consider finding a franchise opportunity that is simplistic. This greatly reduces the number of things you will need to learn and increases your chance of success.

Time

It is important for you to consider the amount of time you will have to spend with your new franchise business. The best chance for success is to make this your full-time job. This will allow you to learn the business quicker, identify and resolve issues, ensure a high quality of customer service, and oversee the financial aspects of the business. If you are planning on continuing with your current career and having someone else run your business, you can be assured that problems will arise in the future. Since you have invested a substantial amount of money in your new franchise opportunity, you are the only one with something to lose.  It is important that you commit your time and protect your investment.

Your Financial Ability

Before you begin your search for the right franchise opportunity, it is important that you examine your financial situation. When researching the cost to start a franchise, the franchise company will provide you with a wide range based on the lowest and highest cost for openings in the previous year. The better criteria for understanding how much money you will need is the “liquid capital” requirement. This refers to the minimum amount of money you will need to qualify for a loan. Liquid essentially means any assets that you can exchange for capital. These liquid assets could be property, automobiles, stocks, jewelry, or anything else of value. Once you assess your liquid capital available, you can then start narrowing down your list of franchise opportunities by what you can afford.

Once you have considered your experience, time commitment, and financial ability, you now have some criteria in place for making a short list of franchise opportunities that may be a good match.

Financial Model of the Franchise Opportunity

Once you have a list of franchise opportunities that interest you, the next step is to dive into the financial aspect of the business. If you are considering purchasing an existing franchise, the owner should be able to provide you with at least three years of financial statements to review. If you are interested in a franchise business opportunity that entails starting a new business, there are a couple of ways to get financials to review. In the Franchise Disclosure Document (FDD) there is an item 19 that provides financial information for the previous year. This information is not required to be in the FDD, so some franchise concepts may not have it available. If the financial information is available, it could be all locations or a subset such as only company-owned locations. If there is no information included in item 19, you should contact existing franchisees which will be listed in the back of the FDD.  Hopefully, you can find at least one owner who would be willing to share their financial information.

Now that you have some financial information to review, it is highly recommended that you work with an accountant to better understand the strength of the financial model. This will not be an expensive service, and an accountant can help you determine the potential for earnings versus the cost to start your own business. Too many people decide to buy a franchise business based on emotions. To protect your investment and ensure you meet your financial goals, it is imperative that you consult an accountant! Please visit our “Professional Resources” page to find an accountant near you.

New Franchise Opportunities

Below is a list of some of the top franchise opportunities and brands in the industry along with some new and emerging brands. If you are interested in learning more about one or more of these franchise opportunities, please complete the inquiry form. A representative will contact you from each franchise company you choose to give you more information on the requirements, availability, and process to start your new career.

Food & Beverage Restaurant Franchises

All Other Franchise Industries

Low Cost Franchises

Benefits to Choosing a Low-Cost Franchise

Most people who are interested in acquiring a franchise opportunity have never previously owned a business.  In this case, it is best to gain experience with a low-cost franchise to reduce financial risk.  Starting with an affordable franchise also allows you to learn about how franchising works and can lead to a quicker return on your investment.  Below are some benefits to starting with a low-cost franchise opportunity.

Low Barrier to Entry

With the average total investment to buy a franchise in the range of $300-$400K, it is difficult for the average person to find the capital to buy a franchise.  However, there are several inexpensive and lower cost franchises that require minimal investment ranging from $20K – $150K.  In some cases, the banks will finance a portion of this total investment which means you could start a low-cost franchise with as little as $20,000 on hand.  If you don’t have any capital on hand, the other option is to use your 401K money.  The program does not entail any taxes, penalties, or interest and you still have your retirement account in place.  You directly pay the money back over time.

Gain Experience

If you have never owned a business, there is a lot to learn.  Once you start a franchise opportunity, you will have to learn all facets of business ownership.  Although everyone wants to own a business, not everyone has what it takes.  One of the benefits of choosing a low-cost franchise is that they are usually very simplistic, which drastically increases your chances for success.  After running your business for a couple of years, you will have a much better understanding of how to run a business and can begin expanding or start searching for other franchise opportunities.

Return on Investment

When you purchase a low-cost franchise opportunity, it dramatically increases your chances of recouping your investment and turning a profit in a short period.  If you invest $300K or more in a franchise opportunity, it may take years before you start turning a profit.  You will also be obligated to make loan payments for several years.  When it comes to a low-cost franchise, it is not uncommon to recoup your investment and start making money in the first 12-18 months.

Low-Cost Franchise Opportunity Options

Below are some of the best low-cost franchise opportunities currently available. Not only are there several affordable franchises from which you can choose, but another option is also looking for an existing franchise for sale.  In many cases, people will buy a franchise, get it up and running, and then fail to put the time an energy into the business that it requires.  This is very common in the franchise industry and provides others with an excellent opportunity to buy an existing franchise for a fraction of the cost it would take to start from scratch.  You can see a plethora of franchises for sale on our “Buy A Franchise” page.

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