Have you always wanted to own your own business? If the answer is yes, but you are reluctant to compete with well-established businesses selling similar products or services, you might consider buying a franchise. Buying a franchise can be a great choice for entrepreneurs who are looking for a new business ownership opportunity without starting from scratch.
Although you may be required to relinquish significant control over your business as part of the franchise relationship, the purchase of a successful franchise will allow you to open up a business with immediate name recognition, goodwill, tested products and methods, group advertising power, and assistance from the franchisor.
If you think a franchise might be the right business opportunity for you, keep in mind a few key considerations before signing a franchise agreement:
• Initial Investment. Remember that the initial franchise fee is only a portion of the amount you will need to get your franchise up and running. Ask the franchisor to estimate the entire amount of fees and expenses that you are likely to incur during your first year of business. Item 6 of the Franchise Disclosure Document lists a summary of the typical costs. If you plan to finance the initial fees by taking out a loan, make sure you include an amount sufficient to cover the entire initial investment.
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