Learning the economics of a franchise business
- Friday, April 16, 2010
Potential small business owners seeking a new franchise opportunity may be inexperienced when it comes to the financial knowhow required for the job, but there is help available.
Such was the case with Christian Brothers Automotive franchisee Brian Klaubert, according to a report from Multi-Unit Franchisee magazine. Klaubert didn't know much about financing his business when he began, but with help from his franchisor, he's since developed an effective system.
Klaubert says that because his business deals with auto parts and labor costs, unit economics is a major consideration. He also says it is critical to manage expenses such as insurance and property taxes, and use technology systems to record and analyze finances.
Most important to his franchise, Klaubert tells the magazine, are three key areas: weekly costs, net profit and basic labor. The figures for each of these areas are shared with his service managers each week.
Additional help comes from Klaubert's franchisor Christian Brothers, which provides weekly sales figures, expense reports and system-wide profitability data.
Interested franchise owners looking for initial financing could receive help from Bancorp and Franchise America Finance. Earlier this month, the two organizations teamed up to create an SBA-guaranteed lending program for franchise businesses.
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