What's The Right Franchise For You?
by Armand Gray
If you like the idea of being self employed yet entering the marketplace with an
already established business then a franchise might be a good opportunity for you.
However, there is a lot to learn about franchises before taking a leap into this
entrepreneurial world. Your previous business experience, amount of investment, and
personal preferences will play a huge role in whether or not you are suited for a
franchise. Plus, you will need to have a franchise idea to help you get started.
All franchises have the possibility of being lucrative and they all have the
possibility of failing. Most of the time the making or breaking of a franchise is the
franchise owner and his ability to overcome problems that present themselves not to
mention staying dedicated to the franchise at all times.
There are three basic types of franchises, including wholesale distribution, products,
and services. The type of franchise you should pick is not the one that has the supposed
possibility of making you the most money because this simply won't work. The most
lucrative franchise for anyone is the one they find enjoyable and don't mind dedicating
all their free time to making a success.
Before choosing the type of franchise you want to open you will need to consider your
business experience, the investment you can make, and what you would enjoy doing.
Investment
When it comes to franchising you will be expected to pay a one time franchise fee
simply to have the rights to open that franchise. This one time non-refundable fee ranges
depending on the franchise you are interested in. There are also other fees associated
with franchises like startup expenses, licensing, insurance, inventory, royalties, and
marketing fees. Different franchises have different fees so it is important to consider
all the fees associated with each franchise you are interested in.
Once you calculate the initial investment for the franchises you are interested in then
you will be able to determine which one best fits your financial situation. If you don't
have the capital for opening a particular franchise then you should find one more suited
to your financial situation.
For example, if you want to open a Bruegger's Bagel Bakery franchise then you need a
net worth of at least $200,000 with liquidity of $100,000. The estimated cost of opening
your franchise is from $230,000 - $489,000 plus the additional cost of real estate. As you
can see this franchise idea requires a significant investment, which should only be made
by someone who has the money and commitment to this type of franchise.
A more affordable franchise is from Dollar Store Services. With only $48,900 you could
have the turnkey franchise up and ready to go. Only $15,000 of liquid capital is required
for this franchise and estimated capital investment is from $48,900 - $600,000.
The coffee business has been booming and Starbucks is a perfect example. However,
Starbucks are really expensive franchises to get into. So, if you have a coffee franchise
idea in mind and don't have much to invest consider the Folgers Coffee Heaven Franchise.
The minimum investment required is $9,999, which is one of the lowest franchise fees out
there.
Business Experience
Many individuals have a franchise idea, the necessary capital, and run with it without
ever considering their business experience and whether or not they are suited to making
their franchise work. If you want a lucrative franchise you need to be able to make the
business work. And, experience in that particular business will work wonders.
For example, if you have worked at a fast food restaurant for 15 years and know all the
ins and outs of the business then opening a fast food franchise of your own makes the most
sense. You have the business experience and the knowledge in that business to make it
work. On the other hand, if you have been a banker for 15 years and decide to open a fast
food franchise you will not have the same level of business experience to make it as
successful as possible.
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