Right Franchising

Franchise Tools

Franchises: How to Buy One…

…And Still Afford Lunch (not just at a Franchise)

Most people drive down the street and see McDonald’s, Burger King and Chik-fil-A.  They believe that is the extent of a franchise.  So, let’s look at some facts.  Below is a good statistic provided by the International Franchise Association that shows the financial cost of a franchise and the percentages of franchises found in each financial segmentation.

Cost of Franchise Businesses graphic

 

Notice that 52% are under $100,000.  This figure would include everything you need to open the franchise, and often includes three months of working capital.  With a 690 or better credit score, you would put down $20,000 or $30,000, and the remainder would be funded with an SBA loan or other funding sources.

Also, notice that only 5.6% are over $500,000.  A McDonald’s franchise costs around $1.8 million for example. Of those 5.6% of franchises, they fall in many categories; restaurants are more likely going to be at the higher-end cost. There are great franchises for $500,000, and great franchises for $75,000 or less. I’ll help you choose the one that fits your needs best.

So, then you may be wondering, “If I invest more money, will I get a better return or a higher profit margin?”  It has been my experience as a certified franchise consultant that there is NO automatic correlation between the cost of the business and the PROFT it can earn.

Surprising? Yes!  But when you want to really evaluate a business, the best approach is to figure the net profit the business can generate.   So, what is net profit?

“Net Profit is the actual profit made on a business transaction, sale, etc., or during a specific period of business activity, after deducting all costs from gross receipts”, as defined by Dictionary.com.   It is easier to say, sales minus expenses.

Right Franchising understands this and matches candidates to the right franchise; one you can afford and one that generates a solid net profit for you and your family.  We do this with real numbers that you can validate with other franchisees (other owners) in the franchise system.  It is easy to do and really helps you make an informed decision.

So, if you’re ready to take the next step of checking out a Franchise, give me a call. I’d love to help you find just the Right Franchise! Franchise.  Call me at 877-307-1458 and let’s get started!.

Looking For New Business Funding?

Funding graphicBut, You Have a Few Funding Questions…

Like:

  • How much money will I need? 
  • How do I go about funding a business? 
  • Is the funding safe?

As a franchise consultant, my clients usually have two fearsFear of failure and fear of funding.  In this article we are going to address funding, and in our next Blog post we will address fear of failure.

How to Fund a Business

Most people have bought a house or a car but a business!  How does one even start to understand where to find the money to fund a franchise?  Here are four interesting facts below and four good ways to fund your franchise.

 It is easier to fund a business than to buy a home. You just need the right sources.

  1. Learn from Gayle at Right Franchising ways to fund a business that are safe, proven and provide peace of mind as you start your business.
  2. We find good sources with low interest or no interest rates for our clients.
  3. Right Franchising will provide funding assistance and analysis. So you make the right decision and avoid costly mistakes.

So, there are better ways than to go to my local bank?  Yes! Because banks have less money to loan, and they have increased their requirements which often makes loans out of reach for most people and some investors.

Types of Funding Plans

  • Rollover of funds – without debt, penalties or interest and the government assumes 40% of the cost of the franchise.
  • SBA Express Loans – offers Small Business Loan Express (UNSECURED) loans with loan limits up to $150,000, which are easier and faster to process.
  • SBA Loans – Loans with 20 to 30% down depending on credit score and debt ratio. These loans are for franchises that are from 150,000 to 1 million plus.
  • No Money Down Loans – these loans require no money down and one can borrow up to $100,000 or more in some cases.

Don’t let the fear of funding stop you from owning a strong performing franchise or business.   There is no charge for the conversation only good solid information to help you learn about funding.  Your desire for a business may be within your reach and you just need information.

Please call Gayle at 877-307-1458 or email me at Gayle@RightFranchising.com to schedule a brief 30 minute call.

Copyright 2015

Right Franchising Overview

Right Franchise Has the Right Experience!

(c) Can Stock Photo_Right Franchising BlogAt Right Franchising, we understand the excitement of owning your own business, and we understand the fearRight Franchising has owned three successful businesses.  We found our business through a franchise consultant.

What Right Franchising Does

Here at Right Franchising, we put our business experience to work helping others investigate franchises and make an informed decision. Our services are at no charge to you as we are paid by the franchise associations.  So, the price for a franchise is the same whether you use a franchise consultant or go it alone. There are no contracts or long-term commitments—just good solid information.  You gain peace of mind and security around your final decision. And, that’s what’s important; this is all about YOU!

The Clients Right Franchising Wants

Right Franchising wants clients who want to know more about franchising and if it is right for them.  They need to be serious about having their own business so that we can provide a thorough and methodical search.  This targeted search saves our clients time, frustration and prevents costly mistakes. That’s why you want to purchase a franchise; the mistakes have already been made and learned from. You get the benefit of their mistakes and their AHA moments.

Questions You May Be Asking Yourself

(c) Can Stock Photo_Right Franchising BlogIs franchise ownership right for me?  How will I know?

Tools from Right Franchising:

  1. Business Characteristic Assessment—10 minutes online.  Answers the following questions:
  • Should I pursue a franchise or a job?
  •  What types of franchises are right for me?
  •  What do I value in a franchise model that fits me?

 How much money will I need?  How do I fund a business?

  1. We will provide funding assistance and analysis.
  2.  We find good sources with low interest or no interest rates for our clients.
  3.  It is easier to fund a business than to buy a home.  You just need the right sources.

How do I evaluate a franchise?
With expertise and tools provided by Right Franchising.

  1. A step by step process to provide clarity and peace of mind.
  2. Expert assistance and attorney referrals to help you understand the Franchise Disclosure Document.  What it really means.
  3. Franchisee Satisfaction Reports answers the question:  Are franchisees happy in the franchise?
  4. What questions do I ask of the franchisor and franchisees?

Your consultant will provide the right questions and in most cases be on the call with you.

Will I make the money I want and need to make?

Here are the tools from Right Franchise to provide real numbers that are understandable and make sense to you.

  1. Easy to understand Performa’s (spreadsheets) with gross revenues, expenses and net (take home) income.
  2. How to ask the financial questions of other franchise owners.  Again, Right Franchising will guide you to the right questions to ask.
  3. How soon will I see revenue coming in?  (You will know before purchasing your franchise.)
  4. How much money will I need during the ramp up period?  (This is a step in the due diligence process)

Click on the link for our Step by Step Process for owning a franchise.  Check it out – there are only 7 steps – anyone can do seven steps. Then when you’ve had a chance to read it through, share with your partner or spouse, then take the first step! Call me if you are interested in starting on the right path with Right Franchising! (more…)