Franchise Start up Costs
The truth is that most franchise owners will tell you that they have saved money for the cost of opening up their franchise units. In fact some franchise companies would often train them on how to save money as part of their start up training.
Many parent companies would often let the franchisee knows that there are hidden cost in starting up a franchisee business. They said that the biggest waste of money when it comes to starting a franchise business is the impatience of the franchisee.
Most people who are new in this business are often excited and happy to start. They often times can’t wait for their business to open. If there are two options for starting up a franchise business, most of new franchise owner would select for speed even if it would cost a lot of money. These choices may really cost a lot of money as some would not notice it. There are many cases that time is not gained or produced any value at all because there is an increased in cost.
Experts say that the secret for having the best result for startup cost is the balance. If you picture speed and time in graph, you don’t want to be both in the extreme. Sometimes there are people who save money to open a business. This is actually not good compared to just spending a lot or sooner than you should.
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There are five expense factors where you often find savings in startup cost. Some of them are quite easy to take advantage of. Some would often require extra work and even expertise. With this kind of business, the saying that time is gold literally applies to every thing because you are trading time in order for you to save. Here are some factors that you need to focus on.
- Franchise fees - There are some franchise companies that negotiate on franchise fees. It is a good idea to save on this right away. It would be best if you can contact those existing franchise owners so you have an estimate on how much it cost. If you are not used to with negotiation, hire a lawyer or business consultant who can actually give you the best bargain.
- Turnkey packages - There are many franchise companies that give turnkey packages. This can help people who are just starting because all you need is coming from one source. This source could be the franchisor or third party seller. This package is often selected because it is convenient. The main purpose of this package is to offer convenience not the best value or lowest price. Sometimes you can learn that the components of the package could be acquired at a much lower cost but the tradeoff is the time and effort that the source invests in. This is actually where one gets a lot of savings.
- Lease terms - This requires you to have an expert advice or assistance if you don’t have any background. A real estate broker who knows the market is the perfect person for this job.
- Cost of construction - Many franchise business needs a location that is prepared based on specification. There are ways to save in this area. It is best if you can accept bids from one contractor to another.
- Equipment and other fixtures - This is where a lot can save money. The market got variety of options that you can choose from. Choose franchise equipment that is readily available to save time and money.
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394 Comments
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