Are those franchises attractive to you?

Franchises have strong appeal for a lot of potential owners as the franchisor has the proven track record and the turn-key business save business owners time and effort to invent the wheel. Before you start a new venture in franchises , what you should know first then?

You need understanding what/how much it costs

There are a number of costs involved in operating a franchise business that you’ll need to include in your assessment of potential profitability.

• Royalty fees are standard, averaging between 5 and 8 per cent of gross sales,some industries may be higher.

• You may be required to buy products and supplies exclusively from the franchisor.

You should be able to obtain financial records from a franchisor to determine the future financial projections for your particular franchise investment. In a franchising world, it is expecting consistent bookkeeping records are essential to effectively benchmark results across multiple locations. What that means? Each location may have different customer population resulting in various level of profitability.So, when preparing the projection, keep that in mind. And remember, check your bankers to ensure the funding is available for your to pursue the franchise investment.

Here are the cost presentation of two major industries: QSR(quick service restaurant) and Tutoring:

QSR industry continuously experiences intensifying competition, changing consumer preference as well as higher value expectations. The continuing increase in consumer demand for healthier dining options is still a big challenge for QSR franchises. If you look at the royalty fee across the listed franchise, you can sense the competition right away.

5 quick service restaurant franchises

Tutoring industry is closely correlated to what parents’ belief and expectation.People believe that social mobility is tied to academic achievement. Also, better education helps kids move up in the world.So, parents spare no effort pour money in supplementary education in order to get into the best schools.

5 TUTORING FRANCHISES

Congratulations on the new franchise business! We will talk about how we can do better in franchise business in next blog.