Before opening a franchise, it’s critically important to realistically estimate how much income your business will gross, and then gage whether that projection will adequately satisfy your expectations, business expenses, and cost of living. Though the process of creating franchise business plans and income maps can be headache-inducing, determining whether you’ll make the money you’re after is an indispensable exercise in financial security.
Fortunately, when opening a franchise, you’re entitled to certain privileges. You’ve literally driven past other franchise owners – potential partners – who’ve undergone the exact experience you’re about to partake in. Plus, you have access to income projections based on how other franchisees have done. There’s also an entire industry of professionals like Upside Group, dedicated to counseling the growth and prosperity of your franchise through innumerable means like franchise marketing and step-by-step operations manuals.
In many regards, opening a franchise takes much of the guesswork out of entrepreneurship. Franchise salespeople should send you FDDs – Franchise Disclosure Documents – which elucidate significant financial and operative figures, such as current franchisees’ income and whether there are currently any lawsuits pending against the parent company. You can also see how many franchises have closed over the last year, indicating a potential red flag for your business.
According to CNNMoney, however, few of the 2,000+ companies which offer franchising provide ample data on whether business is booming at current franchises. The Federal Trade Commission mandates that earnings estimates be accurate and made in good faith, but does not require parent companies to provide many specific details.
A good way to combat inconsistent or inadequate information regarding franchise income is to call up at least 10 current franchise owners and ask about business. You can find out whether they felt adequately informed of financial profitability before opening their franchise, or whether they made less than they hoped.
There’s plenty of cash to be made in the franchise industry. Whether or not you make money depends largely on your work ethic, but is heavily influenced by the company you invest in. The most significant determinant of whether or not your expectations are fulfilled is your planning before the grand opening – so do your research and draft your franchise business plans. And when times get hard, call Upside Group!