Depending on which franchise you are interested in, your initial franchise fee could be as little as $1,000 or as much as $100,000. On top of the initial franchise fee, there are other significant startup fees. So, the total cost of buying and launching a franchise location could run from under $10 thousand, to as much as a million dollars.
What’s involved in running a franchise?
Even if you will be able to hire other people, you yourself will need to know how to operate all phases of the business since you may need to train employees or fill in for them when they are absent or if they leave. You will also need to be a good manager and salesperson and keep good records.
Can I avoid market research by buying a franchise?
No. While the franchise company may help with site selection and other details, there is no substitute for doing your own research. Be sure you engage a franchise attorney to guide you through the process once you are prepared to franchise from a particular franchisor. Remember, a franchise isn’t something you can walk away from easily if it doesn’t work out. Therefore before you sign the franchise agreement, make sure you determine how many sales you will have to make to be profitable and whether your territory has the population and the demand to make it likely you can reach that sales figure even if a competitor opens.
Can I sell the franchise?
Some franchises allow you to sell if you can find a buyer, and some don’t. The UFOC will tell you what the franchise’s regulations are regarding sale or transfer of your contract to anyone else.
Are there any inexpensive home franchises?
Some franchises can be run from home and, therefore, may have lower start-up costs since you won’t be required to build or rent space. But, most of the low-cost home “business opportunities” are not franchises. They are either multilevel marketing or direct selling opportunities, or package deals that promise to give you everything you need to start a business.
What is the franchise agreement?
The franchise agreement is a contract and document between you, the franchisee, and the franchisor. In this agreement you will find all the details of what the franchisor expects of you and what you should expect on the franchisor. This is one of the most important documents you will ever have to sign and follow. Failure to keep to the rules can mean your license to operate is open for termination. However it also means that if the franchisor has not kept their end of the agreement that you have a fall back should anything go wrong between you, the franchisee and them, the franchisor. Having a solicitor or lawyer look over the agreement to ensure it is fair is a must if you do not understand contract law.
Matthew Anderson is the founder of The Franchise Shop which specialises in Low cost Franchises for sale and is the largest UK franchise opportunities directory and experts in franchise marketing and franchise ideas