Like most people, your top questions about franchising are probably financial.
- What is the cost of a franchise?
- How much money can I make?
- How quickly can I get there?
Here's how you can find the answers.
What is the cost of a franchise?
The Franchise Disclosure Document contains critical information concerning any franchise (FDD). The FDD contains essential information concerning the franchise and operating costs and is intended to assist you in making an informed decision about your purchase.
You'll want to look at a few key points in the FDD to figure out how much you'll need to finance. First, there are the initial costs that must be paid to the franchise before opening. Secondly are additional fees, which may be recurring, occasional, or one-time expenses. Finally, the first investment or total upfront cost to acquire the franchise includes equipment, initial inventory, rent, signs, security deposit, training, and working capital necessary during the start-up phase.
What is the earning potential?
You should evaluate the franchise's financial performance. The profits of existing units are disclosed in the FDD. It should be noted that this data may only reflect a specific set of franchisees or corporate-owned franchises. Read the fine print to understand where the information came from, especially when comparing many brands. This will also help you learn how quickly a typical franchise ramps up.
How satisfied are the franchisees, and how are they performing?
When purchasing a franchise, validation is an important aspect of the process. As a potential franchisee, this is your opportunity to talk with existing franchise owners and confirm the benefits of the franchise opportunity. You'll also ask them questions to thoroughly understand franchisee satisfaction and financial success. It's essential to call numerous franchisees from the company's FDD list.
As you can see, thorough due diligence will provide you with the answers you need. Please schedule a quick call with me to learn about your franchise options.
