In America alone, there are over 750,000 franchises.
Many people grow up with the dream of owning a successful business. Some of these people become successful by starting side-hustle businesses. Other business owners gain success by owning a franchise.
If you’ve ever considered owning a franchise, it’s important to do your research before making the investment. It’s a big game of risk and returns, just like any business.
Allow us to make your decision a tad easier with the guide below. We’ll dive into whether or not owning a franchise is worth it.
What’s a Franchise?
A franchise is a business in which a franchisee pays fees to a franchisor in exchange for licenses, branding, franchise products, and valuable knowledge. The franchisor is the sole owner of the business’s trademarks and procedures.
The franchisor is required to provide all franchisees with important operating information. The separate franchises are not to be left neglected or abandoned.
The Investments You Must Make to Own a Franchise
Franchise ownership comes with a large heap of responsibilities. Every franchise owner must invest a pile of pretty pennies, along with time and skill.
Start-Up Fees
One of the largest investments you might make as a future franchise owner is the investment for start-up fees. Each franchise requires a different amount to start a franchise so explore your options!
Note: Start-up fees usually require money to open a specific location and the fees required to gain the rights to operate the business for a set amount of time.
When investigating start-up fees, look into what the average monthly income is for a specific franchise. Think about where you’re wanting to open the franchise as well. Do you think the local business will make up for your financial investments?
If you aren’t sure where to begin in researching possible franchises to own and operate, read online reviews. You can find plenty of opinions and forum chats with simple Google searches.
For example, looking into owning a HealthyYOU Vending franchise by Googling, “owning and operating HealthyYou Vending reviews“.
Time
Before buying a franchise, it’s important to think about how much time you’ll spend opening the business. You’ll be in charge of learning new information, hiring staff members, and training all of the employees. It’s a lot to take on.
Take a hard look at your current life situation. Do you have young kids? What about a partner that can help you with managing the franchise?
More than likely, you won’t have to invest tons of time into the franchise forever. You’ll hire and train amazing managers that’ll aid in managing the business and everyday operations.
Mental/Emotional Investment
Most people don’t consider their mental and emotional health when thinking about franchise maintenance and operation. Owning a business can be extremely rewarding, but those rewards come from overcoming obstacles.
Your emotional and mental investment in the business is essential for starting a successful franchise. You should be excited and dedicated to the business you’re starting. This will inspire your employees to be just as excited.
Chat with local business owners about how they developed the perseverance and mental grit to open a business. While they may not be franchise owners, they’ll still have valuable information for you to store away for a rainy day.
Keeping an Eye Out for Royalty Fees
The one large, ongoing fee many people forget about when buying a franchise is the royalty fee. Royalty fees are crucial and must be kept in the back of your mind at all times as a future franchise owner!
Every year, the franchisee must pay money to the franchisor. This money is a fee equal to a certain percentage of sales. You must pay this fee no matter how slow or heavy business was for the year.
Finances can become sticky for franchise owners because they forget to subtract royalty fees from their yearly income, along with payroll and food costs.
Creating a Long-Term Mindset
Talking about these investments isn’t meant to paint owning a franchise in a negative light. It’s important to know the promises and sacrifices you’ll make as a franchise owner. You can still be successful even with these sacrifices!
If you’re serious about owning a franchise, develop a long-term mindset. This mindset will motivate you as you navigate new waters and battle common business hardships.
You can’t allow yourself to feel defeated during the initial hiring process or as you learn how to create accounting systems for the store. These things are frustrating for many people, but people with a long-term mindset know these challenges will pay off.
The Final Answer
The big question you’re asking is, “Is franchise ownership worth it?”
Well, as irritating as it might be to hear this, there’s no for sure answer. It depends on your dedication to owning a franchise and how you define success for yourself.
Dear Future Business Owner, Is Owning a Franchise for You?
Are you an aspiring business owner? If you are, there’s a good chance you’ve explored your many options. You might be wondering if owning a franchise is right for you.
There’s no one set path for business owners. A lot of it is trial and error and a ton of research. Always make sure to do your research before diving headfirst into a new business adventure.
For more business guides, check out the rest of our site. We also offer guides on lifestyle, technology, finance, and entertainment.
