Owning a franchise is another type of entrepreneurship. A franchise is a license to use the trademark of an existing business. It is run by a franchisee under the brand name of the national or a multinational company (Franchisor). Starting a franchise can be lucrative if the brand already has a loyal customer base.
Practically, franchisees adopt the entire model of the franchisor, ranging from the branding and marketing to pricing. Once approved, the franchisee enjoys all the benefits of franchisor’s brand and the other resources such as logistics, accounting, and professional consultancy.
Make Sure You Check Your Funds
Being a franchisee, you must know about your financial standing. You will waste a lot of time in finding and searching franchise opportunities without knowing your budget limits.
It is best to prepare your net worth statement before deciding to become a part of a franchise business. Prepare a list of your assets and the liabilities. The difference between your assets and liabilities is your total net worth. Your franchisor will require this information from you. Mostly the franchisor set their minimum net worth requirements.
Always consider beyond the minimum buying requirement of the franchise, listed as registration fee and equipment cost. Do not ignore the costs that involve marketing and advertising activities. You need a significant amount of money to survive on break-even point and the initial loss period before your business actually starts hatching the profits.