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Tuesday, June 30, 2009

What is the Required Investment to Open a Franchise?

The initial investment needed to begin a franchise can vary widely depending on the franchise you choose to become an owner of and the kind of options you opt for.

Research shows that the total investment needed can range anywhere from $15,000 to $250,000 with a liquid capital obligation of about $50,000. Once a franchise has been established, the royalties that the franchise charges and the fees also differ.

The investment needed for opening a franchise, depending on the franchise, comprises of:

Equipment, fixtures, furniture, promotional and initial advertising expenses, the initial franchise fee, insurance, lease hold improvements, point of sale systems (software and computers), royalties, in store and outdoor signage, and training.

How to start a franchise business?

The initial step is to collect all the data you can about the various franchises out there. Many franchises are fast food or specialty food restaurants, but there are also automotive supply franchises and various specialty product franchises that might be more in line with what you'd like to do.

To get a good idea of what is available, look for some franchises online or in your local area. If there is a franchise in your area, take the opportunity visit their location and talk with the franchise owner or with the manager. This will aid you to get a feel for the total package of the franchise and what type of things you should prepare for.

As you meet with the franchise owner, here are some questions to ask the franchise owner: Are they pleased with the franchise they chose? Ask how well their business is doing compared to other franchises in the area. What was their initial step in starting their shop? What is the most complicated part of their work?

As you become more familiar with the different options available to you, you can make an informed decision about which franchise will be the best fit for you. Keep in mind that starting up a franchise can be expensive, but you have product familiarity on your side and you can get loyal customers quickly to bring your franchise success. 

Billings_Farnsworth

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