The easiest way to be a successful entrepreneur is to partner up with an established business or brand. Countless companies open their stores for franchising, but there are certain factors to consider before plunging into the world of business.
Restaurant franchises can be the most lucrative franchise of them all. Find the right spot and partner with the right brand, and you’ll be raking in more than $100,000 a year at the minimum. Of course, the investment cost will vary depending on the size and brand of the franchise; a full-on Mcdonald’s will cost more than a small Subway stand. Food franchises, when appropriately managed, require very little supervision aside from the initial setup. Food-to-go is currently one of the more successful models. Shops that specialize in sandwiches, subs, donuts, and tacos, and other handy items require very little space. Profit margins might not be as big as the usual fast food joint, but overhead is low, and the number of customers is quite high.
Hardware and 24-hour convenience stores will always have customers. The initial investment can be quite high, but you’ll get your money back within 2-5 years. Make sure you have long-term leasing agreements and full options to renew. Inflated lease pricing can raise your overhead to unacceptable levels, so make sure your contract limits rent price changes. Buying property might be a good investment if you have the cash, but it also ties you down to one location. Convenience stores and hardware are insulated from the changes in consumer buying practices, remaining mostly unaffected by online juggernauts like Amazon or eBay. Hardware store customers want to see what they’re buying, and convenience store patrons probably can’t wait for shipping. Franchises that sell merchandise require a steady flow of items, and you need to keep your inventory stocked at all times.
Partnering up with a service company might require a little bit of know-how. Don’t jump into a franchise unless you know how a thing or two about their operation or you have people that have experience and expertise. Service franchises can be anything from barbershops and mailing centers to equipment maintenance and pest control. Your personnel becomes your most valuable assets as your brand partner will only offer a bit of training and maybe some equipment.
Before You Dive In
Make sure you cross your T’s and dot your I’s, primarily when you’re investing more than $100,000. A good lawyer can look over your contracts and make you aware of hidden clauses that could cause you problems. Ask for an FDD or financial disclosure document; it allows you to see the real state of a company as well as some of its franchises. Choose your location carefully and make sure it’s not saturated with similar businesses. The first two years of any franchise can be difficult, but smooth sailing awaits after the birthing pains. The right franchise can be your ticket to early retirement and an elegant lifestyle. Do your research and dig through the myriad of franchises to find the one that works for you.