HOUSTON BUSINESS REVIEW

Solidifying Your Financial Plan
By Adrienne Leigh

Adrienne Leigh is the President of FranNet of Houston, a franchise consulting firm that provides coaching to clients who are exploring franchise opportunities. She has over 20 years of experience in franchising and entrepreneurial start-ups. Each week, she will provide comprehensive information on the $1.5 trillion franchise industry.You can reach Addrienne at 713-586-8836 or via email. To learn more about Adrienne Leigh, check out her here

Obviously, you need to be very concerned about your financial ability to not only buy a franchise but also to continue to operate it until such a time as it begins to make a profit. Fortunately, careful due diligence will enable you to determine the financial requirements of your business before you make your decision. Those requirements fall into five basic categories and will be described in detail in the Uniform Franchise Offering Circular (UFOC).

Every business will have certain start-up costs. In addition to the normal capital requirements to launch a business, a franchise system will assess an initial fee that typically covers many items, including the rights to use the name and trademarks of the company, the rights to distribute the company's products and/or services, access to the franchisor's established business systems, initial training, assistance with site selection and a protected territory. An ongoing fee, or royalty, pays for continued support provided by the franchisor, as well as continued use of the trademarks, business systems and enhancements.

Operating capital (sometimes included with start-up costs) is another important factor. It is the money you will need to operate your business until it becomes self-sufficient.

What Does it Cost?
As you review these costs, it is important to remember that there is no automatic correlation between what it costs to buy a franchise and Return On Investment (ROI).

What's the Total Investment for a Franchise? *

• Under $50,000.00 - 28.6%
• $50,000.00 - $100,000.00 - 23.9%
• $100,000.00 - $250,000.00 - 32.7%
• $250,000.00 - $500,000.00 - 9.2%
• Over $500,000.00 - 5.6%

*Source: Franchise Times Magazine Survey Franchising is All Right, Thank You.

Typically, you will need 35 - 50 percent of the total investment in cash. Assuming your credit is acceptable, financing of the balance is usually not difficult. Your FranNet consultant will help you identify financing options.

Coming Next Week – Franchise Selection Decision Plan

FranNet - The Franchise Connection provides FREE SERVICES for those looking to purchase their own franchised business. Ethical, experienced consultants give guidance, information and support while coaching clients to achieve their goals safely and affordably.

Meet real franchise experts and ask them questions, live!

FranNet - The Franchise Connection will be offering a series of free webinars, and seminars, each featuring a specific franchise opportunity, with valuable insight from an experienced FranNet expert.

Upcoming Webinars and Live Seminars

• Wednesday, November 29th @ 1:30 pm – The Legal Document Preparation industry (retail with a twist)
• Wednesday December 13th at 7 pm – Is Franchising a Good Career Alternative for You?$$$  (A live seminar in Houston with Adrienne Leigh presenting)