Franchise Funding

Written by Peter Tran

July 29, 2017

A lot of entrepreneurs prefer to buy a franchise rar than start ir own new business. reason for this is that s involv in running
a franchise are much more measur than s of staring a
new business. However, re are no guarantees in business.

While establishing a new business
may give an entrepreneur more
creative dom it also requires more
capital re and more ning. ne to detail fairly
easy on ir advertising and marketing campaigns.

Franchising provides an entrepreneur
with a proven system and support of a much larger organization. An
entrepreneur of a franchise nes to spend less time on advertising and
brand recognition.

Anor advantage of being a franchisee is that
entrepreneur gets technical support all way. As part of a franchise
system, an entrepreneur can count
on efforts of or franchisees to compliment marketing programs.

re are several costs involv in setting up a franchise and an
entrepreneur nes to consider all of m before ing up to be franchisee.
ft consideration that an entrepreneur
nes to make is that initial franchise fee is usually non-refundable. This
can amount to several thousand dollars.

In addition, establishment costs of a franchise are high. establishment costs
are very comparable to entrepreneur
setting up a new business.
se costs include rent and costs.

Just as a new business
owner nes to decide between owning an office space and renting out a space, so
too does a franchise owner. owner nes to decide if he or she wants to rent
out commercial property, own it or rent out a small kiosk in a mall.

Again just as owner of a new
business would, franchise owner also nes to come up with a business
complete with financial goals and targets. This is not only to
raise capital from business investors but also to get franchise.

An entrepreneur of a franchise
may also ne to pay franchisor royalties bas on a percentage of weekly or
monthly gross income. An entrepreneur
is expe to make se payments even if monthly or weekly earnings are not
very high.

Finally, an entrepreneur nes
to pay into an advertising fund. Some portion of advertising fees may go for
national advertising or to attra new franchise owners.

Source

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