The Cheap Franchise Dilemma
Franchises just can’t seem to catch a break. If they are expensive, why do they cost so much? If they are cheap, what’s wrong with them? Goldilocks could possibly be the only one to find a franchise that is just right.
The Franchise Price Decision
Too many people start and end their franchise search by looking at the price. Looking at the price is a good starting point, but there’s more to a franchise than its price. Before committing to a franchise, you should be able to answer the following questions:
- Would I like to own this franchise?
- Will I get adequate support from the franchisor?
- Can it deliver the lifestyle I desire?
- Can I really afford it?
- Am I willing to do what it takes to make this a success?
How to Research a Franchise
It is important to research your potential franchise to find out answers to questions like “What will be required of me, financially or otherwise, as a franchisee?” and “What can I expect from the franchisor?” A good place to start your research is the franchise’s website . A reputable company will make information publicly available for prospective franchisees.
Naturally, the franchisor wants all franchisees to be successful. When a franchisee fails, it’s bad for everyone concerned. An established franchisor knows what it takes financially for a franchisee to be successful and can help you determine if their franchise is suitable for you. Key financial numbers to take into consideration in your franchise decision include:
- The franchise fee: a payment to the franchise for the right to be a franchisee.
- Start-up costs: the amount it will take to get the business started.
- Royalty: an ongoing payment by the franchisee to the franchise.
- Net worth: your total assets less outstanding debts and loans. If your net worth is too low, you may not be able to handle unexpected expenses if they arise.
- Liquid assets: assets that can be easily turned into cash if needed.
- Forecasted revenue: how much revenue you can expect to generate from your investment as a prospective franchisee. This is where the true value of the franchise is determined.
Finding this information might be as simple as reading through the franchise website , and it helps you make a well-informed decision about whether this “cheap” franchise is actually a perfect fit for your financial needs.
Finances are only part of owning a franchise, however. Is the franchise part of a field that interests you? What expectations does the franchisor have as to your skills, experience, and passion? For example, here at Best in Class Education Center, our ideal franchise owner not only has management or business experience but also a desire to invest in educating the next generation.
You are bringing your passion and experience to the table—not to mention paying a franchise fee and royalties. In exchange, you should be getting support from the franchisor. When researching a potential franchise, investigate not only what you will be investing in the franchise but what the franchisor will be investing in you. This should include help establishing your franchise, initial and ongoing training, and ongoing advertising and marketing.
Talk to Current Franchisees
The best information you can get is from current franchisees. Hearing things from their point of view can be enlightening. Look at them. See what they do. Hear what they have to say. Try to imagine yourself in their shoes.
It’s Time to Decide
You have finished researching a franchise. If you followed the links, you have seen the important elements of the Best in Class Education Center franchise. It’s no longer a question of cost alone. It’s a question of whether the franchise delivers fair value for the required investment. If it does, it’s time for the next step.
The Next Step
If you can see yourself as a Best in Class Education Center franchisee, let’s get started now. Call us at 425.880.2688, and we will take those next steps togetherBack