When it comes to investing in a franchise, if it’s run properly, some of the main pros are the fact that everything is practically laid out for the franchisee.
They figure out all of the ins and outs as they already have: a credit card processor set up,
software to track your orders from them and payments to the franchisor. They also have determined how the store should be decorated to comply with their standard.
You won’t be left making tons of decisions like the type of uniform employees will wear because the company has worked through that already. There is generally extensive training included in the deal to make sure everything is up and running without nearly as much trial and error. Many franchisors also provide a coach who provides that hands on , day-to-day availability to walk through the various adventures of owning a business. This helps a lot of people as they don’t have to go over that huge hill of all the details.
Buying a franchise requires an invest of a good sum of money. You must pay the franchisor for all of these great things that they’ve done and then rent needs to get paid. If you own your own business, you’ll get to make all the decisions yourself. It’s cool to a lot of people as they would rather make all those decisions themselves because they care to make some changes. With franchise you really can’t make changes as they have a standard look. Additionally if the Franchise decides to upgrade the look you may well be required to do that whether or not your finances work for that upgrade.
It can cost anywhere from 30,000 – 250,000 on average to start a franchise depending on how big or small the company is. There may additionally be the cost of a building and finish out that might be a very significant amount. (Owning a McDonalds costs more than a few happy meals!) There’s an initial cost that could be hundreds of thousands of dollars to get in then there’s national advertising which might or might not be advertising for your particular place. Royalties from earnings is another cost and some franchises require monthly payments whether or not there’s money being earned. Also all products must be purchased from them which can get tricky with perishables. The costs can add up but the same could be said for starting just about any business.
There are many things to consider when deciding to take on an investment in a franchise, as it can be a rewarding business opportunity. Call us to schedule a consultation to help walk you through tax services you may need.