Making the decision to become your own boss and purchase your own business is an exciting challenge! And, if you’re considering buying a franchise concept, you’ve got some additional questions to consider:
Is the territory I want to buy available for purchase?
Franchisors often have set areas or territories offered for purchase. When the territory is purchased, that territory is no longer considered available for another franchise owner to open. This prevents two businesses from the same brand being in competitive proximity to one another.
What kind of training/support does the franchisor offer?
The beauty of franchising is that you don’t have to have prior experience in an industry to purchase most franchises. The franchisor will provide the training you need in all areas of the business such as equipment operation, technology, bookkeeping, ordering/ecommerce and the like to get you started, and many continue with ongoing support throughout the life of your business through either home office support or a franchise coach that serves as your mentor.
What is the length of the franchise agreement?
Each franchisor handles this differently, but as a general rule, the length of most franchise agreements is ten years and is subject to renewal at the end of that timeframe. Coincidentally, funding options/loans are often also ten years in length which aligns perfectly with the franchise agreement term.
What are the net worth and liquidity requirements for this business?
In addition to net worth and liquidity, franchisors typically have certain financial criteria they require for a potential candidate to be considered. Other fees associated with buying a franchise include franchise fees and royalty fees as well.
Financial concerns such as inventory, equipment and real estate are also important elements of franchise ownership and should be factored into your overall financial spreadsheet. Service-based franchises generally have less startup costs than brick-and-mortar businesses.
Tenet Financial Group focuses on helping entrepreneurs navigate the funding process to buy a franchise – whether buying a franchise as a new business or buying an already open franchise from its current owner – and utilizes numerous funding types including SBA Loans, Unsecured Lines of Credit and 401(k)/IRA Rollovers (also known as ROBS Funding). Give us a call to discuss your funding needs: (888) 901-3335 Option 9 for our Senior Consultant team. This conversation is a no-obligation, fast conversation to determine how we can assist you.