Buying A Franchise Is Not Turn-Key
A "Turn-key business" is a misnomer because there is no such thing as a turn-key business. Those advertising a turn-key franchise are doing a disservice to the industry and should stop using that term.
There are a number of steps that require focus, attention and effort from prospective Franchisees prior to "turning the key" and opening your doors for business. First and foremost is due diligence - it takes effort to find a worthy franchise investment. Spend the time needed to research a system, call its franchisees and review consumer sentiment to the brand.
Once you have chosen a franchise investment,
1. Create a business plan and realistic financial projections.
Ensure you have enough working capital to support your expenses to get through your startup and break-even point.
2. Finding financing.
Explore options around obtaining financing and spend time speaking with various lending institutions. A 1% decrease in your interest rate can save you $17,000 on a $250,000 loan over 5 years.
3. Site selection.
One block down the street may save you money on your lease, but may cost you a lot more in missed sales and traffic. Find the right balance between location and price and do not solely rely on franchisor employees. Take time and effort to hire or find independent support. This is your investment and you should do all you can to ensure it's going to give you the biggest return possible. Location is extremely important.
4. Lease Negotiations.
Hire a lawyer to help negotiate your lease. You may save on monthly lease payments as well as create more favourable lease terms.
4. Hire staff prior to opening.
Learn how to hire the right staff because opening your doors is going to be busy, exciting and stressful all at the same time. You do not need to be dealing with staffing issues that may lead to negative first time impressions by your new customers.
Buying a franchise is not turn-key and a franchise investment will need focus and attention prior to opening. Take time and spend money to ensure your investment has the best chance of success.