Tips For Buying A Franchise For Sale
Investing in a franchise for sale can be a great option for new business owners. They provide structure, have an established business model, corporate marketing plans, an established brand, and a management team to help you along the way.
But there are a series of questions you should ask before you jump in and sign up with a franchise group:
- What are the initial fee’s in signing up to become a franchisee?
- How long is the training period? Are there costs involved.
- What is the initial capital investment?
- Is this a viable franchise? Can I make money from it? How much would my salary be?
- How much time and effort is involved until I start making money? Running a business is hard work, it takes a lot of time and commitment and may be a while before you make any decent money. A franchise is an already established brand, and ideally some of those hurdles should be easier to overcome.
- Is this franchise successful elsewhere? What makes it successful there, would the same principles work in your area? Be sure your aware of your target market, what works in Sydney may not work in a regional area such as Dubbo, NSW.
- What are the typical working hours?
- Do I have to pay loyalties, or branding?
- Do I have to pay for any marketing?
- What are the future growth plans of the franchise group?
- What kind of support does management offer?
- Are there any other franchises established in the area?
- What is the Management style like? Is there flexibility.
- How much control do you have over the business decisions?
- Who controls the hiring of staff?
- What is the cost of the stock? Where is it sourced, is it a strict list, who pays for the transport, can you order products not on an authorized list.
- What are the leasing conditions? What if repairs to the shop front are needed or equipment needs replacing?
- What are the exit clauses in the contract? If the franchise doesn’t work and you want to leave the business, make sure you carefully consider exit strategies.
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The ultimate advice is to do your research. Speak to other franchise owners of the same group, how have they experienced it? How long did it take them to make money? What works for them in terms of bringing in business? Where there any additional hidden costs they weren’t informed about. Id suggest speaking with a franchise owner outside of your area, and one not recommended by management – it will give you a clearer picture.
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