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Edmonton Business For Sale | Acquiring Franchises
Many people often think that franchises are failsafe business opportunities says Edmonton business for sale, however business owners should always be aware of the risks when purchasing any business. An accountant recalls a story where an entrepreneur brought financials from pizza franchise, thinking they had an amazing business opportunity that was too good to pass up. After the accountant dug through all of the financial details, they found that the franchise or was planning on charging that entrepreneur higher royalty fee then they had charged any previous franchisee. After the accountant calculated the effects that this increased royalty fee would have on the financials for franchisees in comparable locations, they discovered that the return on investment was not high enough to justify the risk. While franchises can be an amazing opportunity for many business owners, purchasing a franchise should be regarded as any other business purchase: due diligence is definitely needed to determine if that business is the right business for them. There are hundreds of franchises for Canadian entrepreneurs to choose from at any given time, that choosing a franchise shouldnít be considered difficult, and with a variety of choices, there is bound to be a franchise that suits just about any business owner.
The first step that entrepreneurs can take says Edmonton business for sale when they are looking at purchasing a franchise, is looking at all of the options that are available to them. It would be a grave mistake to not compare several franchises. Since there are so many different options, it shouldnít be hard to come up with a list of about three for comparison purposes. Entrepreneurs should be objective when looking at their options, and things to keep in mind is how much support does the franchise or give their owners, what do the royalty fees look like, and what kind of flexibility do they have in their systems.
The reason to consider how customizable the franchise is, says Edmonton business for sale is that some business owners like the idea of being able to pick and choose in their business. Some franchises offer the flexibility of being able to offer a wider array of products or services, or are less rigid in their franchise processes. For example, a print franchise is often able to choose what equipment they purchase, therefore what print services the offer. One location might do print on paper only and another can print on vinyl or fabric substrates. Looking at the flexibility of the franchise can help a business owner decide if that is what they want. Edmonton businesses for sale also recommends that if an owner wants to customize too many franchise processes, purchasing franchises may not be the best option for them. If an entrepreneur wants to customize too many things, their best bet may be to open their own business from the ground up where they can choose all of the products and services as well as processes.
Many entrepreneurs believe that purchasing franchises is a failsafe way to be a business owner says Edmonton business for sale. The reason why people think that is because they donít often see franchises going out of business, and also franchises have a recognizable brand already in existence, they also have proven products and services that have a customer base ready to buy them. For these reasons, franchises are often seen as a foolproof way to be a business owner. And while the statistics show that being a franchise owner can be beneficial: industry Canada saying that 50% of all businesses are out of business within five years, but only 14% of franchisees go out of business in the same amount of time. A 14% failed rate is still far from foolproof. There is always inherent risks when it comes to becoming an entrepreneur, and people should consider franchise ownership with the same level of respect they would show any other business.
When entrepreneurs are considering purchasing a franchise, there are some things that they should do before making a commitment to the franchise to ensure a great experience. The first thing that they should do is take the financial information that the franchise gives them when they are considering ownership to an accountant. Edmonton business for sale says itís never too early to take the information to a chartered professional accountant who can help them determine if this is a viable business or not. Chartered professional accountants are extremely well versed in business and will be able to read not only the financial information that read the franchise agreement, lease agreement and common fees, crunch the numbers for the royalty fees as well as even review the payroll to see if the ownerís time is accounted for fairly. Accountants may even be able to ask the franchise for financial information from a wider variety of locations. The reason they do this says Edmonton business for sale is to get an average of what operating the business is going to be like across the board. Not just using financial information from their biggest and best locations. All of these things come together like a puzzle for the accountant who will be able to make a fairly good determination if they think the business is viable and a good risk for an entrepreneur to take or not. Several business deals have ended at the meeting with the accountant because sometimes the risk is worth it.
Other things that entrepreneurs can do when they are considering a franchise is to talk to a wide variety of franchise owners. A franchise or often will take a potential owner around to meet some of the owners and see some of the stores, but these are owners that have been prompted on what to say, and are often the most impressive stores with the best sales. In order to continue to get an average of what looks like to own a typical store, entrepreneurs should speak to owners either walking in off the street unscheduled, or calling them. Business owners may find that they will be able to get blunt and unprompted answers on what those owners feel wanting that franchise is like.