Consider these factors before opening a franchise
- Tuesday, April 3, 2012
Opening a franchise can seem like the best of both worlds to an individual who wants to own a business. They get to be their own boss, while simultaneously having the support and benefit of a recognized brand and reputation. However, consumers who are thinking of opening a franchise should follow the same rules that apply to opening any other type of company, and consider factors that are sometimes overlooked to make the best decision.
For example, what are the true costs of a franchise opportunity? While franchises will provide potential owners with detailed information about the costs they will incur, it's important to weigh the overall expenses that may or may not be included in the contract, according to Entrepreneur Magazine. This can include renting a facility, legal, accounting and tax preparation fees, property insurance, life and disability coverage, employee retirement plans and even travel and lodging expenses to attend mandatory franchise training.
It's also important for individuals to determine if they will need financing to purchase a franchise, whether they will have business partners and how much they need to invest to take ownership of a franchise.
Once the financial particulars are dealt with, consumers should determine if they need any special skills or certifications to operate a franchise. For example, some franchises may require owners to have technical knowledge or experience, while others may require a certain level of education. Individuals should do research on what their particular responsibilities will be if they purchase a franchise and plan accordingly. For example, they may consider taking a bookkeeping or accounting course, or taking a few business classes to boost their knowledge.
Lastly, adults should weigh their decision against their future goals and plans to make sure it's the right choice for them. For example, do they want to expand in the future or relocate? If this is the case, will the franchise allow them to do so and are the terms and conditions spelled out in the contract? Most franchise owners are forbidden from opening other chains in different locations, so adults should think long and hard about whether they are okay with this rule before making a decision.
For some individuals, owning a franchise can be a great opportunity and a worthwhile business venture. So understanding all the benefits, drawbacks, terms and conditions beforehand can better help adults make the right decision.
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