While buying a franchise can be a great way to run your own business, it’s also a major investment. Depending on the location, size, brand and market for the franchise, you could be looking at dropping a significant chunk of money just to get the property and brand. And then there is the time spent getting it running, as well as the training to understand the business model the franchisor operates. There are a lot of things that you have to learn and prepare yourself for. The Moran Family of BrandsAlta Mere Automotive Outfitters, Mr. Transmission and Milex Complete Auto Care franchises. Still, it’s a good idea to see that you have everything you need to be a successful franchisee.
A risky drive
Franchising is quite different from starting your own business. The main difference is that you’re running under a business model that is defined by your franchisor, rather than your own rules. Moran’s uses a proven model built on professional auto repair and high-quality service. The guidelines found in the model are there so that your franchise has a consistent level of service and goods, along with maintaining a dependable brand. Because you have to follow them, you have to ask yourself if you’re willing to stick with this model while you run the franchise.
More importantly, as a business, franchising involves some form of risk to invest and to function. Because of this, you have to question whether you’re able to tolerate a lot of it, especially in the first few years of operation. To assess your own risk tolerance, look back on all the major decisions you made in your life involving money. In those decisions, the cost of failure was significant. How did you handle the choice? Did you prepare, or did you have some backing assuring a soft landing so you didn’t have to take on severe debts? Either way, how you responded to the decision and its aftermath is crucial in determining whether you can take on the big swings that running a franchise can entail.
An investment with returns
Of course, even with the talent to handle the risky plunge and a willingness to follow at least some rules, running a franchise involves other things you need to prepare for. The most significant is money. Buying a franchise involves a lot of upfront costs, from purchasing the brand to acquiring the property to other initial fees. There are a lot of things that you need to research to determine if you have the funds and equity necessary to complete the initial purchase, including the fees are expected in the first 12 months.
Another thing you have to consider with franchises is that many expect you to have a significant net worth. This value is determined by the amount of assets such as properties or goods you have minus the liabilities such as debts you possess. Knowing this important fact will help you narrow your search into who will accept you based on net worth, as well as what you can afford.
If you think you can afford to buy a franchise and have the net worth to start one, you’ll to prepare yourself with financing the purchase. If you already have enough capital, then you should be fine. However, should you need to raise funds to match the amount required, you should look into different options. You could sell stakes in the business to friends and family, or seek out a loan from either a bank or the U.S. Small Business Administration. Either way, once you have made all the preparations and sought out the right franchise, you can look forward to owning your own business.
Want to learn more about franchising? Visit the Moran Family of Brands website!