Setting up a business from scratch may not be the cup of tea for everyone, an easier and more effective way is to look for Low-cost franchise opportunities, here are best business franchise opportunities to start which requires lower investment and already established brand name.
What is a franchise model?
Definition of the Business franchise model is where a corporation aids a business owner who wishes to buy the corporation’s rights to use its brand. In return, the corporation charges the owner fees or percentage from the sales of units.
Is owning a franchise profitable?
Owning a franchise can be profitable, but that depends on many factors, like:
- The popularity of the brand
- Marketing efforts of products by the business owner
- The location of the franchise
- Franchise with low start-up costs etc.
For example, if you are looking to set up a franchise of a school, it is vital that you choose the location wisely like a residential area with no other schools in the proximity of at least 3-4 km.
In a franchise business, the owner of the business is a Franchisee who has bought the rights to the business logo, name, and model of the Franchisor.
Factors to keep in mind to choose the best franchise opportunities in 2020 are:
If you are looking for franchise business opportunities in 2020, then choosing the right franchise is very important, the following factors will help you do so:
- Conduct market research on the franchises you are targeting – their profits, product or service quality and reputation.
- Choose low cost franchises with high profit
- Look at the revenue model of the Franchisor and their experience
- Calculate the initial investment like office or shop lease, hiring employees, salaries of employees, maintenance of the property, etc.
- It is important to know the ratio of your initial investment against the rate of return or revenue
- Analyze your future competitors
- Weigh whether the franchise will be able to give you returns within 2 years of initial investment
- Create a 5 year projected growth forecast to access where the Franchisor’s business plans and marketing efforts will really materialize
- Understand and read the terms and conditions laid out by the Franchisor
- Make sure the Franchisee has an option for you to exit incase of closure down the franchise business
For a Franchisee, it is also important to know if the Franchisor agreement gives them litigation right. It is advisable that any owner who thinking about acquiring a Franchise, go through a reputed Franchisor who thinks about the future business expansion through the Franchisee.
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