Five Tips to Finding a Great One!

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LOW COST FRANCHISES

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LOW COST FRANCHISESFive Tips to Finding a Great One!

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What Need to Know About Low Cost Franchises

A low cost franchise can be a great way to test the waters of business ownership, but just because the cost is low, doesn’t mean it is a good buy. You need to:

• Ensure Positive Brand Recognition

• Examine the Investment Costs

• Define Your Needed Income

• Understand the Competition

• Make Sure the Franchise Business Fits You

This presentation goes into the details of each of the above to help you filter through the low cost franchises to find a great one that fits you!

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LOW COST FRANCHISESFive Tips to Finding a Great One!

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Tip #1: Ensure Positive Brand Recognition

One of the most important things you can do in finding a great, low cost franchise is to look at the company’s name recognition and reputation. Ask yourself the following questions:

• Is the company name recognizable to you?

• Do any of your co-workers, friends or family know the name and/or reputation?

• What is the franchisor’s and franchisees’ online reputation?

Keep in mind, one of the biggest advantages of buying into a franchise is the value of the recognized brand and a great reputation. This will help you in attracting customers quickly and the ongoing royalty payments are more easily justified when you have a solid brand driving your franchise growth.

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LOW COST FRANCHISESFive Tips to Finding a Great One!

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Tip #2: Examine the Investment Costs

You need to look at all the costs associated with owning a franchise. Consider one-time fees as well as fees or charges that will be assessed “down the road”, in addition to recurring fees -- monthly royalty fees, annual franchise fees and the like. Just because a franchise has a low initial cost, it may not be as “affordable” as you think. Consider the following:

• What do you get in return for the royalty fee?

• Are there any ongoing training, educational or marketing fees?

• Can additional fees be added at the franchisor’s discretion?

Keep in mind, costs are only half of the equation. You need to examine the profit potential in relation to those costs. Calculate the franchise return on investment as a key indicator of the franchise business’ potential to put money in your pocket.

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LOW COST FRANCHISESFive Tips to Finding a Great One!

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Tip #3: Define Your Income NeedsWhen choosing among low cost franchise options, it’s important to know your own financial needs and what you might reasonably expect to bring in via the business. Here are some questions to ponder:

• How much personal income will you need each month in order to maintain your lifestyle?

• Do you have enough cash reserves to maintain that lifestyle until your franchise begins bringing in income?

• Does the franchise have the potential to generate enough income for you to keep your current lifestyle?

A low cost franchise might be a great option, but if you cannot achieve and maintain the lifestyle you desire, you’ll need to pass in favor of something with better earning potential.

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LOW COST FRANCHISESFive Tips to Finding a Great One!

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Tip #4: Understand the Competition

No one should even think about starting a business until they have done a thorough analysis of their competition. Here are some key points:

• What are the strengths and weaknesses of your competition?

• What is the franchise company’s unique selling proposition (USP)?

• How can I leverage that USP in my target market to secure customers?

• Will you be competing against other franchisees?

You want to be sure you have what you need to compete and aren’t getting into a situation in which your franchise business gets lost in the sea of competition.

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LOW COST FRANCHISESFive Tips to Finding a Great One!

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Tip #5: Ensure the Franchise Business Fits You!One of the most important things that many do not do is to take the time to do a self-inventory. To find the right franchise requires you clearly understand what you bring (and don’t bring) to the table. Ask yourself:

• What skills are needed for you to succeed in the franchise?

• Do you have the sales and marketing experience that could make the difference between success and failure?

• Do you have the personality for franchising?

Only you can determine if you have what it takes to succeed in business. Are you a good fit for franchising? Download our 22-page “Franchise Fit” eBook to assist you in this analysis.

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LOW COST FRANCHISESFive Tips to Finding a Great One!

Canadian Franchise Opportunitieswww.CAfranchiseOpportunities.com

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SummaryA low cost franchise doesn’t necessarily mean it is a great opportunity. Low cost does not equate to money making potential.

Do this and increase your chances for finding a great, low cost franchise!

• To make money and get value for you investment, the franchise needs to have positive name recognition.

• You need to understand all the costs associated with buying the franchise, including one-time, recurring, hidden, and ability of the franchisor to add costs.

• The franchise needs to provide you with the income you need to sustain your lifestyle or improve it, depending on your reasons for buying the franchise.

• You need to understand the competition and how you are going to compete, in addition to making sure the business is a good fit for you.

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