Edmonton Business For Sale | Should Entrepreneurs Acquire Franchises
Many entrepreneurs feel that franchises are a great option for them because of the brand recognition, and because of the customer base that already exists says Edmonton business for sale. And while franchises are great option, business owners need to take into consideration that they pay additional money for that brand recognition and customer base. And like any other business, entrepreneurs need to do their research to be sure that investing in purchasing that business is the best decision for them.
The best way to research franchises, is simply by looking at all of the various options that are available to them says Edmontons business for sale, and start comparing. Some of the things that they will want to compare is how expensive the franchise fees are as well as the monthly royalty fees. How are those royalty fees calculated? Are they on a percentage of sale, are the franchise fees At a certain amount, is it a flat fee. Do the franchise fees go up incrementally or are they the same amount theyíve always been? They should look at how much support the franchise or will give each owner. Some had offices never support their stores some not only offer hands-on training that they will have staff that can come and work in the location as needed, or regular rotating basis.
Will they have to pay anything additional, for example for websites, for online marketing, for a television, radio, or newspaper advertising? Edmontons business for sale also recommends that entrepreneurs look to see how many systems and franchise processes, with that business. Some franchises have a ton of processes from what their stores look like, to how to train their staff, how to prepare their product. Think of McDonaldís for example going to one of their restaurants, everyone knows exactly what theyíre getting from the level of service to what the location looks like to the taste of their product. It is an extremely high processed franchise. Entrepreneurs will want to consider that, is some owners will fit with having rigid processes, and some entrepreneurs like more options to customize. Just be cautious when considering franchises, says Edmonton business for sale because if an entrepreneur wants to customize too many of the franchise processes, perhaps they should consider that franchise ownership is not the right fit for them. They may be best suited to open their own business from the ground up or they can choose all of their own processes.
Edmonton business for sale says once a entrepreneur has an idea of what franchises are going to be the best fit for them, what they can do is start talking to a variety of owners. This will help them get a really good sense of what itís actually like to own a franchise. Entrepreneurs should go to big stores as well as small stores, as well as stores that have been open for a very long time versus stores that have recently opened. By talking to owners getting a sense of how the franchise operates, can give an entrepreneur an idea of if this is the right business for them.
Many people think in this interesting economy says Edmonton business for sale, that being a franchise owner carries fewer risks than traditional businesses. And while industry Canada statistics show that there may be some truth to franchises being slightly more stable, itís not known why. The statistic says that 50% of entrepreneurs close the door to their business in five years, and 14% of franchisees go out of business in the same time period. Business owners should know that while this looks like an amazing statistic, 14% is still a huge percentage of a fail rate. Also, fewer franchises a shutdown, only because the franchise orders step in and operate the business until a new owner can be found, not necessarily because they are succeeding. Keeping this in mind, entrepreneurs should always be mindful that purchasing any business franchises or not, has risks and should be considered with the same amount of respect.
The first thing that entrepreneurs should consider when they are looking franchises is understand that the people that are giving them the franchise information actually get paid to sell them franchises. They work on commission quite often and even though they come across as a business advisor, they are not a business advisor and they are not looking out for an entrepreneurís best interest, they are looking to sell their product. While many franchises try to get owners that will be the best fit for their franchises and system, itís not always the case. Those selling franchises may inspire a sense of urgency to complete the transaction quickly, and entrepreneurs should know that being rushed to make any financial decision is something they should avoid, no matter how much pressure they get, they should always take all the time they need to make a good decision. If that means they miss out on a certain opportunity, then it clearly was not the opportunity meant for them says Edmonton business for sale.
The next thing that a entrepreneur should do once they have found a franchise that they think would be a perfect fit for them, is take all of the financial information and franchise documents to their accountants. The reason for this is because accountants have a great deal of experience reviewing business financials and advising owners, so this makes them the perfect person to see if that franchise opportunity will be viable moving forward. They will be able to not only look at the financial information and determine if itís incomplete and more information is required says Edmonton Business for Sale, but they will also read the franchise agreement, review the lease, crunch numbers for the royalty fee and even go so far as to determine if a business owners time spent working in the business has been accounted for fairly in the payroll, or if they are working a lot of hours for free. All of these different variables come together to get the accountant a great picture on whether this opportunity will give them a good return on investment or if the risk is too large.