Before you begin your search for the perfect franchise opportunity, it’s essential to undertake a self-evaluation and preparation process. The road to becoming a franchise owner can be challenging and, at times, scary. However, it is also a gratifying experience for the right candidate and can be lucrative.
To help you understand whether franchising is right for you, we have outlined some essential considerations before taking that first step towards owning a franchise.
Most people would rather own a business than work for someone else. Franchising offers an opportunity to do just that – provided you can meet the owner-operator requirements imposed by the franchisor. Franchise systems typically require you to meet specific criteria and go through an application process before they’ll even consider you as a franchisee.
Since there are specific steps to owning a franchise, consider asking yourself these questions to help navigate your new business venture.
How much money should you have on hand?
The initial investment required to buy into a franchise can vary greatly depending on the type of business you’re purchasing and its location. Franchise startup costs can start at around $10,000 and go up to $5 million, depending on the industry. The majority land between about $50,000 to $200,000, according to Franchising.com.
Before signing the franchise agreement, expect to incur costs including professional fees for a contract attorney and an accountant to review the company’s franchise disclosure document (FDD).
Also, it’s essential to keep the franchise fee in mind. The franchise fee is the entry fee to use the franchisor’s brand, operating system, support team, training, marketing, and more. Those fees can run from around $20,000 to $30,000 through $100,000 for more established brands.
For those who don’t have the cash up front, franchisors often have relationships with lenders or even some in-house financing.
Uni K Wax partners with leading finance companies to offer competitive rates for loans and equipment leasing options to help new owners start up quickly without the concern of reaching into their own pockets.
How do franchise owners get paid?
In most cases, you will pay the franchisor an upfront fee for the right to operate their business and then make periodic payments as a percentage of your revenue.
The specific terms of the franchise agreement will vary depending on the franchisor, but most will require that you pay an initial franchise fee of around 10% of the total investment. You will also likely have to make an ongoing royalty payment as a percentage of your revenue.
A franchise owner makes money through profits after the overhead costs have been deducted. Profits are generated from sales and services within the business. A great way to increase profits is to consider multi-unit franchising. Multi-unit franchising is when a franchisee operates more than one location within a defined territory. This model offers the potential for more customers and a much more significant increase in sales.
What are the risks and benefits of buying a franchise?
Owning a franchise is a beautiful way to get into business for yourself while avoiding the risk and upfront costs that come with starting a new venture from scratch.
Franchise owners are entitled to use the franchisor’s established business system, training, and branding, which means you can hit the ground running from your first day on site. This is especially helpful for first-time entrepreneurs who may not have the experience to navigate the challenges of business ownership from the get-go.
The benefits of buying a franchise don’t end there. Franchise owners also benefit from an established relationship with the franchisor. They are there to help you navigate any challenges that come with the early stages of business ownership.
With benefits can also come risks when buying a franchise. As a recession looms here in the U.S., franchisees should look into which franchises could potentially withstand tough economic times.
Think about which businesses can be recession-resistant, last through all four seasons, and are sustainable. Uni K Wax offers waxing services that are popular year-round. Waxing services are quick, leading to a higher volume of clients throughout the day. Waxing is also a high-margin, low-overhead service that customers are not likely to give up or do on their own at home. So choosing a franchise like Uni K Wax is an excellent option for new investors looking to profit from the increasingly popular health and wellness space.
Franchising allows would-be entrepreneurs to buy someone else’s business model and proven success formula. These steps to owning a franchise will help them buy into an established brand and business system. However, franchising is not a get-rich-quick scheme. It’s a long-term business model that requires much hard work and commitment. But you can come out on top with the right support system and proven business model.
Consider franchising with Uni K Wax
Now is the time to join a brand that has revolutionized the waxing industry. We have a proprietary waxing procedure that cuts service time in half, allowing you to pump up the customer volume. There are still many prime, protected territories available. If you’d like to learn more about the franchising opportunity with Uni K Wax, request more info here.