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Owning a Franchise

Corporate layoffs are presenting a unique challenge for working professionals looking to make a change in their career. Investing in a franchise business is one path many are taking to gain control over their financial future and achieve their desired level of financial independence. Aspiring franchise owners have a lot of questions when it comes to owning and operating a franchise business. Questions about the cost of franchises, financing options, and franchise selection can be daunting, but that’s why the International Franchise Professionals Group (IFPG) is here to help.

Our 1,300-member franchise broker group can guide aspiring business owners through every step of the process, from selecting the right franchise to financing it successfully. To better assist our potential clients in identifying the right franchise to invest in, we have compiled a list of answers to frequently asked questions on owning a franchise.

1. What Will It Cost to Open My Own Franchise?

The cost of opening a franchise varies depending on the franchise you decide to invest in. The initial franchise fee can range from a few thousand to several hundred thousand dollars. With that said, that isn’t the only cost associated with investing in a franchise. You should also consider the costs of real estate, equipment, employees, training, inventory, marketing, and professional fees. When you add these costs to the initially franchise fee, the total cost of investing in a franchise can range from $50,000 to $1,000,000 or more.

2. What Financing Options Do I Have for Starting a Franchise?

The financing options available to aspiring franchise owners depend on the creditworthiness of the business owner and the franchise they’re looking to invest in. Most franchise broker groups, like IFPG, have relationships with many of the largest lenders in the market to assist their clients in financing their franchise. To qualify for financing, you’ll likely need to have a credit score of at least 680, as well as adequate collateral, including substantial assets.

In addition to traditional lenders, you may be able to participate in crowd funding platforms to finance your franchise. You should also keep an eye out for loans and grants that may be available for specific franchise businesses.

3. What Should I Look for When Selecting a Franchise?

When selecting a franchise, it’s important to look for a business opportunity that fits your skills, interests, and goals. The best way to determine if a franchise is the right fit for you is to research and understand the industry, its trends, and its potential for growth. Additionally, you should look for a franchisor who is established, invested in the success of its franchisees, and transparent with its fees and support model.

The cost of a franchise, though often a major determining factor, should not be the only consideration when selecting a franchise business. You should also carefully review the Franchise Disclosure Document (FDD) to understand the full cost of investing in the franchise. The FDD will also provide you with vital information about the franchise you’re considering, allowing you to make an informed decision. Having a good lawyer review the FDD is always a wise idea.

4. How Long Does It Take to Open a Franchise?

Franchise ownership usually begins with a call to the franchisor or franchise broker group. After a franchise inquiry is received, the franchisor or broker will begin evaluating the applicant’s background. This process usually includes going over the applicant’s credit rating and other financial records. Once the evaluation is complete, the franchisor or broker may begin helping the prospective franchisee identify and secure financing for their business.

The process of opening the franchise will vary depending on the franchise and the applicant’s qualifications. If the applicant meets the criteria for franchise ownership, then they may be able to move forward with opening the franchise in as little as two to three months.

5. What Kind of Support Will I Receive After Opening My Franchise?

Most franchisors provide a robust support program for their franchisees. This typically includes comprehensive training, detailed operational guidelines, constant access to business advice, and ongoing marketing support. As a franchisee, you will be able to maximize the success of your franchise business through these support programs and by leveraging the franchisor’s established brand and reputation.

At IFPG, we understand that franchise ownership is a big commitment. That’s why our 1,300 member broker group is here to help you choose the right franchise and ensure you have everything you need to succeed.

Topics:

Franchise,

Franchisor,

Franchise Fee

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