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Is a Franchise Worth Your Investment?

Buying Businesses August 26, 2016

Buying into a franchise can be a successful strategy for building wealth. You can create value within an established, branded enterprise and benefit from established processes and best-known methods.

Similar to any small business opportunity, make sure the franchise is a good cultural fit and skills match. Buying a Pizza Hut probably isn’t the best idea if you’re celiac. Don’t like kids? Probably stay away from Gymboree. But if you love cars, Autobarn could be perfect for you.

A franchise arrangement usually requires an initial investment of several thousand dollars, with royalty fees payable on a periodic to cover advertising and brand related costs.

Benefit from In-Built Support Networks

In addition to providing marketing support, a franchise will also provide access to the buying network where, presumably, you’ll be privy not only to products specific to the franchise but special pricing and payment terms.

Buying into a franchise also lessens the risk for inexperienced business owners. A franchise has established systems and processes that make it easier for inexperienced owners to operate effectively without the burden of the unknown.

Additional Considerations

Before you decide on a franchise, a full understanding of your obligation and the obligation of the franchise is critical.

The best indicators of success are a diligent approach to understanding the agreement and being careful not to commit to onerous terms and conditions that are impossible to fulfil. You’ll still want to study the location and market to determine the chances of meeting your obligations and making a profitable income that meets your requirements.

Finally, like any small business, the success of a franchise requires hard work and long hours. Effective staff management takes time – you need to ensure that they are healthy and reliable and most importantly, that they respect you, the business and the role they play.

You’ll often be called on as a counsellor, or to fill in unexpectedly. If you’re running a franchise part-time or as an investment, talk to a business broker.

The Business Broker with Franchise Experience

LJ Hooker Business Broking is Australian’s leading business broker. With experience as an owner of 11 Pizza Hut franchises and 4 Gloria Jeans outlets, Gautam Jain and his wife Vanita have the technical expertise to give you the best advice on owning and operating a franchise.

With clients that include Dominos, Snap Printing, Kwik Kopy, Dairy Farmers, Oporto and Michel’s Patisserie, we can match buyers with trusted brands in franchising for a mutually successful outcome.

We offer follow-up sales support and the only database designed for business broking in Australia. For more on how to buy a franchise, visit our homepage or call 02 9552 1111.

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