08 Sep, 2017

Low Investment Franchises

Every one of us wants to make the best deal in any transaction and save some money. We are more careful about what we pay out. It therefore makes sense to look for a low investment franchise to buy. A prospective buyer may ask the question; what’s the cost component of a low investment franchise? The cost setup of a franchise opportunity is made up principally by the following. 1. The franchise business license This is what the buyer of a low investment franchise will pay to the franchiser. In exchange the buyer uses the franchiser’s name and the franchise’s opportunity with all the support on how to run the franchise. The franchiser will provide the buyer with information about the business. From such information the buyer will be able to tell what is covered in the business fee. In some industries it might cover initial equipment and supplies necessary to commence operations. 2. The franchise business set up costs Irrespective of the franchise business you opt for, there will definitely be other costs for you to consider. These costs will be determined by the kind of franchise you go into. An example for this would be home based franchise which will not attract costs such as rentals as compared to a franchise requiring the hiring of some space. Other costs such as telephone, stationery and payroll costs should be considered. An analysis of the above costs will give guidance as to what will be required to get the operations of the low investment franchise going. A franchise with a low franchise fee but requires the hire of business premises is undesirable in comparison to one with high franchise fee but can be operated from home. Thus to decide on which franchise is the cheapest, you cannot consider any of the above costs in isolation. Above all this is the aspect of the profitability of the business. As much as the low investment cost may be enticing, profitability of the business is of prime importance and should be considered at the onset. A low investment franchise with a ceiling on its profitability is less appealing than a high investment franchise with favorable future opportunities to increase profits. Because it is becoming more difficult to access credit, franchisors are giving better offers which a capital challenged investor can go for. There are franchises from all sectors of the economy priced reasonably within the reach of many aspiring investors.