Multi-Unit Franchise Experts

Franchises under $100K? Business in Orlando, Florida

How to Evaluate Orlando Franchises Under 100k

Investing in a franchise can be an exciting endeavor. But it’s also a major financial commitment that can bear fruit with a bit of research and effort. Every potential investor considering a franchise should know both the opportunities and the risks that exist in the franchise space. When it comes to franchises that cost under $100,000, the process of evaluating any particular opportunity is paramount. If you’re interested in investing in a low-cost franchise in the Orlando, Florida area, here are a few things to consider.

The Initial Investment

Before diving in, understand exactly what the initial investment for a given franchise entails. Generally, there are two constants when examining any franchise offering — the cost of the franchise and the cost of equipment, supplies, and other initial charges. The cost of the franchise will include the franchisor’s fees and purchase of the franchise, as well as any initial training fees. Additional expenditures may include the cost of inventory and inventory control systems, plus renovation, advertising, and legal fees. All told, the initial cost of the franchise should be less than $100,000.

Existing Customer Base

The importance of an existing customer base should not be disregarded. Every investor should identify the franchise’s customer base: What is the customer base, what is the average investment, and, more importantly, when and how are customers aware that the particular franchise exists? These are key questions to ask and research when evaluating any franchise. Analyzing your competition in the area should also be part of your due diligence process, as should an analysis of the customer needs in the given franchise’s market.

Financial Security

Financial security is critical in any business venture, especially when it comes to franchises. A complete financial statement and profit and loss statement should be readily available, and you should understand the company’s current financial state and recent performance before moving forward with any type of investment. Interested investors should also determine the franchise’s assets and liabilities, track its cash flow, and evaluate its capital structure.

The Opportunity & Your Goals

Some prospective investors may not understand the difference between opportunity and goal. Opportunity involves capital investment and expansion in a business, while one’s goals involve personal goals in the story they are telling, such as having a job they love or the potential to make lots of money. One should ask themselves what type of individual they are and whether they are the type that embraces adventure and risk in their personal and professional life or desires job security and a steady income.

Location

After evaluating the costs and financials of a franchise, prospective investors should also examine the area in which the franchise is likely to operate. This will influence the success of the business. Identifying nearby competition, examining the retail landscape, understanding trends in the local industry, and familiarizing yourself with the demographics of the surrounding areas are all essential for success. Understanding the local political environment can also give you a sense of comfort when investing in a particular location.

Growth & Profitability

Franchise or business growth and profitability should be of paramount concern when exploring investment opportunities. Interested investors should research previous financial statements to gain a better understanding of how the franchise has performed. Knowing the growth potential, such as how much the franchise has grown and whether it has been profitable in the past, can help you make an educated decision about investing.

Adequate Support

Franchisees should make sure that the being invested is in has eligible support from the franchisor. Adequate support from the franchisor and other franchise operators allows for successful operations. Franchisees should make sure that there are resources available to them should they need assistance. This will enable a smooth transition into ownership for the new franchisee and instill confidence in the franchisor’s operations.

Investors should consider these points when examining franchise opportunities under $100,000 or any other investment for that matter. Taking the time to evaluate your options and conducting the proper due diligence will help to ensure a successful franchise investment.

Topics:

Franchises Under 100K,

Investing in a Franchise,

Initial Investment

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