“I’d like you to check out this franchise for me, you know, go over it and see if it makes sense.”
When you are thinking about buying a franchise, there are a number of specific things to look at:
1. How much does it cost? Be sure to factor in all of the associated costs which come with the purchase. If you need to fit out premises, be clear on total costs.
2. Can you afford it? Do you have the money available, or can you access it? It might be family money, funds sitting against your mortgage, or you might need funding from the bank. If you need bank finance, start talking to the bank early. It’s taking longer for loans to be approved since COVID.
3. How much do you want to earn? If it’s a ‘start up’ you need to allow for a ramp up period, while you’re getting established and building your client base. Be realistic with this one.
4. How much can you actually make from the business? Take your time to check this out. Does the business have the physical capacity to give you the return you want? Look at this realistically.
5. How long will it take you to get your money back? A business is an investment. You need to be able to get your money back, within the term of the franchise.
There are more questions to consider, but this is a good place to start.
Peter & Kate