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If you have always wanted to own your own business but don’t want to do all the leg work to get started? Have you thought about buying into a franchise?
When you buy into a franchise you are purchasing the right to sell a certain product or a service using a system that has been successfully developed by the franchisor. However, the actual success of your franchise is up to you. You normally need to pay an initial fee as well as a royalty based on the percentage of your sales. What else do you get when you buy into a franchise? Generally, you get the right to:
* Use the franchise trademarked name.
* Advertising support.
* Training in profitably for operating the business, as well as other necessary assistance.
Just like any other business, you need to do your research to ensure that the franchise you choose will be a good fit for you. Once you have made a decision, ask the franchise to send you it’s “Uniform Franchise Offering Circular”. This is a required federal document containing an abundance of important information. For example:
* Start-up costs.
* Annual fees.
* Key elements of your franchise investment.
* A sample copy of your franchise agreement.
You should take this information to your attorney and accountant to review the details of the agreement. It’s also a good idea to talk to other franchises to get an idea about their experiences with the franchise. You should ask them if the business is profitable and the length of time it took to make a profit. Be sure to ask how satisfied they are with the support they receive from the franchisor.
Your next order of business, after you have selected a franchise that fits your needs, will be to obtain the necessary financing. Be prepared. When you visit your bank take financial statements that detail your expected income and expenses as well as expected cash flow for the first few years of business. These statements will not only give you an idea of how profitable your new business might be, but it will be very helpful when qualifying for your business loan.
For a detailed analysis of your new business, contact our office at 866-497-9761 to schedule an appointment with our advisors to ensure that your business is on the right track.
