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re: how hard is it to buy into a franchise business
Posted on 4/24/24 at 9:48 am to LordAkri67
Posted on 4/24/24 at 9:48 am to LordAkri67
Franchises are tough.
An average UPS Store does $1M+ in annual sales and half the franchise owners make less than $50K per year.
Costs can be all over the map depending on the industry. Franchise fees may only be the beginning. A royalty or percent of net sales is common. In the restaurant space being forced to buy all your supplies from the parent company is also common. Geographic exclusivity needs to be discussed up front.
At the end of the day; it often feels like the only person making money is the parent franchise company. Be sure to talk to persons with existing franchises before jumping in.
Given the amount of cash you have it’s going to be somewhat limiting. As a reference; most recognizable fast food chains start by requiring access to $1M liquid cash. For more lucrative ones like Chic Fil A that number quickly jumps to $2-3M. At which point you’d be forced to take on partners which has its own host of issues.
An average UPS Store does $1M+ in annual sales and half the franchise owners make less than $50K per year.
Costs can be all over the map depending on the industry. Franchise fees may only be the beginning. A royalty or percent of net sales is common. In the restaurant space being forced to buy all your supplies from the parent company is also common. Geographic exclusivity needs to be discussed up front.
At the end of the day; it often feels like the only person making money is the parent franchise company. Be sure to talk to persons with existing franchises before jumping in.
Given the amount of cash you have it’s going to be somewhat limiting. As a reference; most recognizable fast food chains start by requiring access to $1M liquid cash. For more lucrative ones like Chic Fil A that number quickly jumps to $2-3M. At which point you’d be forced to take on partners which has its own host of issues.
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