There is more than just franchise fees
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Posted On :
Nov-01-2011
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Article Word Count :
549
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I think franchise business ownership can be a great way to build wealth and financial freedom and while I think buying a franchise is a great option, independent businesses can work too. In the end, the key to your success is proper planning.
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Well, I got a call from a friend of mine looking for some free advice on franchise concept.
They had seen an advertisement on the web to buy a franchise and were really excited at the opportunity. I think the direct quote was, “It only costs 20,000 dollars to buy this franchise and they guarantee a six-figure income in less than twelve months.”
Now, before getting into the fact that making such a claim on a website without referencing the FDD (Franchise Disclosure Document) is against the law and making my friend understand for actually believing on the income claim or before reminding him that NOT everything said on the Internet is true, I choose to suppress my natural sarcastic tendencies and be a little more diplomaticin this approach.
That’s why; I would ask a simple question.
How much does it cost to you in buying this franchise and funding your business operations?
My friend replied that the franchise concept fee would be around 20,000 dollars.
OK, I asked again that how much is needed to fund the franchise business aspects like Working Capital and Advertising?
My friend said 20,000 dollars, which made me think that the cost might be this only to buy this franchise and fund the business and also for that investment you will make 5 multiplied with your money in 12 months.
Suddenly, he showed signs of not being sure that made me make me a pause over franchise brokerage and consulting business.
In all fairness to my friend, this is not uncommon. We see something that seems so good, which makes us excited and it clouds our judgment. If you want to buy a franchise, or any other business, it is important to consider the BIG picture. This means mapping out your costs, preparing a detailed business plan, reviewing the documentation and getting a COMPLETE picture of what it takes to run the business.
When you buy a franchise, there is more than just the franchise concept fee. It is better to think about inventory, employees, real estate and utilities, marketing costs, working capital and training. This is where many business failures occur, a lack of both understanding and having adequate capital to fund the business.
In my experience, everyone (including myself) makes the critical error of not appropriately determining the costs needed. In fact, I always say about being successful in a business. Even if you buy a franchise, it will take LONGER to achieve profitability that you think. In addition to this, it will ALWAYS COST MORE…
I think franchise business ownership can be a great way to build wealth and financial freedom and while I think buying a franchise is a great option, independent businesses can work too. In the end, the key to your success is proper planning. It is necessary to take the time to understand the costs and capital needed. Also, take the time to learn the business, create a plan and prepare yourself for unexpected setbacks that are almost certain to happen. If you take this approach, you will not only make a better decision; but increase your chances for success
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Article Source :
http://www.articleseen.com/Article_There is more than just franchise fees_98538.aspx
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Author Resource :
The author of this article has specialization in Franchise Concepts. His enormous experience is summed up in the article ‘Franchise Disclosure Document brings the master plans for the Franchise Opportunities’. Along with this he also provides franchise consulting.
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Keywords :
franchise concept, Franchise Consulting, Franchise Models, Franchise System, Franchise Brokerage, Business Coaching, Strategic Busi,
Category :
Business
:
Marketing
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