Estimating Profitability of a Franchise Chance

The following answers to posed questions should provide basic information relating to choosing the right franchise partner and the possible questions you need to be asking any potential franchisor about a franchise opportunity.

Should I research the franchise industry?

You can research a particular franchise industry via on-line franchising directories, franchise magazines and on-line franchising resources. Have you prior business experience?

Do you have prior business experience?

All franchisors will provide potential franchisees with expert training seminars, on-going support and advice in the initial stages of your franchise operation.

A good franchisor will offer effective support networks to optimize the success of your franchise. Ask to see business annual forecasts and sales histories of the franchise opportunity you are interested in becoming part of.

Alongside the support given from your franchisor, support and advice will also come from other franchisees.

It is important to remember when deciding to enter into a franchise agreement that you have methodically researched the particular franchise industry you are interested in, and you are aware of the pros and cons associated with this franchise opportunity.

8 Key Questions Posed in Approaching a Franchisor and a Franchise Opportunity

Every franchise will require its franchisees to pay an initial fee.; This fee is the starting point for the franchise agreement.; The size of the fee will vary substantially from franchise to franchise.; All potential buyers of a franchise first need to calculate how much they are able to invest and rule out franchises that are too expensive.

Franchise Profitability

By deducting the size of the initial investment, running costs and loan repayments from estimated income potential franchisees can calculate how profitable the business is likely to be.; With this calculation franchisees can then decide if the franchise will make a good investment.;