Edmonton Business For Sale | Small Business Franchise Ownership
Buying a franchise can be angreat business decision for many entrepreneurs says Edmonton business for sale. The reason for this is because buying a franchise although there is a higher cost associated with paying the franchise fees as well as royalty fees, businesses who own a franchise also own the brand recognition that comes with having a franchise. In addition to that brand recognition, entrepreneurs have known products, an existing customer base that knows then name and products, as well as complete systems for operating their business. This can be extremely beneficial to entrepreneurs who are great at following systems. Statistics show that franchises are less likely to close the doors to their business in five years. Industry Canada says that 50% of all businesses are out of business within five years however only 14% of franchisees go out of business in the same time period. This may be due to a number of factors including brand recognition, an existing customer base and known products and services. It also can be attributed to the fact that franchises often have proven systems on how to operate their business.
However not all entrepreneurs are well suited for franchise ownership says Edmonton business for sale. If an entrepreneur wants to customized to many of the franchise processes that exist, franchises may not be the right business for them. Similar to how people who buy McDonaldís probably are not going to want to sell hotdogs, there are several entrepreneurs who want to create their own systems and be able to customize their products as they want. Because of this, those businesses should not pay the higher fees associated with buying a franchise and paying royalty fees, and just open up their own business from the ground up.
Once business owners have decided that franchise ownership is the right decision for them, they should figure out which franchises they would like to own. Some entrepreneurs want to buy specific franchises because not only are they are familiar with the brand but they are also fans of the company and product. However says Edmonton business for sale this mentality does not always make a good business decision. Entrepreneurs should always consider several franchises when they are making their decision. Edmontons business for sale says the reason for this is because franchise systems are very different depending on each different franchise. Some have more strict rules than others, some have higher royalty fees than others, some allow a certain degree of customization within their business. All of those things need to be taken into consideration when entrepreneurs are deciding on the right franchise system for them.
Once business owners have the right franchise chosen for them, they need to do their due diligence just like any other entrepreneur buying any other business. They need to send the financial information to their accountant to review and help decipher says Edmonton business for sale if this is going to be a viable business for them. The accountant will be able to decipher the various information that the franchise will give to the entrepreneur they will read the franchise agreement, see if thereís any missing expense categories from the finances. Review the lease, franchises fees and royalty fees and see if the payroll numbers adequately account for the ownerís time.
Many entrepreneurs think that franchise ownership is easy says Edmontons business for sale. Because of that easy reputation, a lot of business owners are considering it especially if they are first time business owners itís true that franchises are a contained system complete with brand recognition, customer base and developed products and services. It doesnít make it any easier to run the business. Operating franchise has the same risks that owning any business has associated with it. The only difference is there is a manual to follow on how to do it. Entrepreneurs of non-franchise businesses can easily follow a system on how to run their business, but can be outlined to them by their accountant. However there is no one forcing them to follow that system like there is in the franchise.
When entrepreneurs are considering the franchise ownership, they need to take several things into consideration. Many things that are not included in considering traditional business ownership. That is the franchise fees as well as the royalty fees. In addition to buying the business which has a cost associated with that says Edmonton business for sale. There is also a fee to buy the rights to use that name, which is the franchise fee. And the royalty fee is the monthly payment associated with being able to continue using that name on an ongoing basis. Business owners need to review the royalty fee that they will be paying in order to help determine if this business is viable. There was an instance where a woman trying to buy a pizza franchise would not have been able to comfortably pay the royalty fee after paying rent. She ended up walking away from the business knowing that there was no way that she was going to be able to earn a living after paying such a high royalty.
Other things that entrepreneurs should consider when theyíre buying franchise is what are they buying along with the name. Many franchises have specifications that business owners must follow, some franchises have none says Edmontons business for sale. There are very strict franchises, that specify all of the activities that a business owner must participate in. Business owners should be aware of those specifications before they make the decision to purchase.
Business owners should also speak to a variety of franchise owners to find out there unprompted, unfiltered and honest feedback on what itís like to own that franchise. They will be able to speak freely and tell the entrepreneur how it actually is to only franchises which can better prepare that entrepreneur for owning that business. Says Edmonton business for sale