The 411 on Low-Cost Franchise Opportunities
Owning and operating a franchise of a successful brand is a popular business venture that can result in positive economic gains. Getting started with purchasing a specific franchise is a task that requires a significant amount of thought, research and consulting. If you are considering purchasing a low-cost franchise, here are three effective tips that you should consider.
Let’s start by identifying what we deem to be a low-cost franchise. According to research conducted by franchise.com, “while costs range from less than $10,000 to upwards of $5 million, the majority of franchises run from about $50,000 or $75,000 to about $200,000 to get started.” Based on these numbers, we consider $50,000 to be a low-cost initiative. Now that we have established how we define lost-cost or affordable franchises, let’s take a look at the most important details to consider when purchasing a franchise.
Research – What Franchise Opportunities Are Out There?
Like any personal or financial investment, you should spend a quality amount of time investigating the various opportunities that exist. If you have a specific industry you are interested or experienced in, we suggest starting there. Choose several brands from your initial research and contact them directly to learn more about them. It is important to avoid being shy in order to get the most out of your conversation. To help with your initiative, we suggest creating a list of questions beforehand. These questions should address your concerns and aim to help familiarize yourself with typical day-to-day operations associated with the franchise. Here are some sample questions to help you get started.
- What is your favorite part of the business?
- What is your least favorite part of the business?
- How long have you operated the franchise?
- What are your biggest obstacles to success?
- Why did you choose to pursue this specific business?
- What does your typical work day consist of?
- What do you wish you knew before you started?
These are just a few of the types of questions you should ask to get the most beneficial information to make your decision. If you are inclined to learn more about the business after this interaction, there will be additional resources to review. Most companies that you interact with should have a disclosure document that they will share with you. This document should include financial information, franchise fee disclosures and steps required in order to successfully purchase the franchise. You should collect and carefully review these documents and compare them with one another to determine which is the most realistic fit for you personally.
In order to make the best decision for yourself, it is essential to commit to this type of research before making any financial commitments.
Financial Resources – What Are You Able To Commit To?
After you have conducted outward research on what low-cost franchise opportunities are available, you’ll need to evaluate what is reasonable for you financially. If you are unsure of what you are capable of committing to economically, consulting a financial professional to review your assets is an appropriate way to determine what is feasible and what is not in terms of your investment. In many cases, you will be required to meet minimum requirements related to net worth and asset liquidity. By attaining financial consulting, you are putting yourself in the best position possible to make an educated decision based on your available resources.
You will find that many franchises will be hesitant to share any sort of financial projections with you. Although this may seem like an attempt to avoid sharing information, the franchisor is simply abiding by franchise laws, which strictly prohibit making any sort of financial representations. On the contrary, you should be highly skeptical of any franchisor that makes guarantees or claims about how much you will make.
Start Up & On-Going Costs
Before you can commit to the purchase of a franchise, you must be well educated on the initial investment required, as well as the on-going costs you will have to commit to paying in order to operate the business. The majority of franchisors will require what is called a franchise fee. This fee covers the cost of getting you set up in the franchisor’s system. In addition to the upfront cost, it is common for franchisors to collect royalties and other associated fees. These can include a percentage of profits from services provided as well as consistent funding for continued resources that the franchisor provides.
Before making an ultimate decision, it is crucial to review these costs and fees to ensure you are making the most appropriate and responsible decision. In order to ensure you are fully educated on your financial commitment to the franchisor, we suggest retaining the service of an attorney experienced in the franchise industry.
Why You Should Consider Mag-nificent For Your Low-Cost Franchise Purchase
Mag-nificent is an event entertainment company that provides a variety of services for creating fun instant photo experiences for all types of events. All of our services are tied together with an innovative app-based engagement platform that allows all of the event’s attendees to participate in the process by creating their own photo memories from the event and contributing those photos to the event’s permanent photo and video album. Our unique solutions allow our franchisees to offer families, corporations, schools, non-profits fun, affordable and instant photo memories for every occasion.
In addition to offering a high-demand service in a rapidly growing industry, Mag-nificent delivers continued support to its franchisees by giving them the tools to achieve sustained financial success. This type of support includes professionally consulted marketing schemes, full-time sales/call centers, continued product development, and most of all, attractive profit margins for the franchise owner. Contact our team to learn more about our unique services and how you can find success with the Mag-nificent brand today.
