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Investing in a Franchise

Posted by Chris Peterson | Aug 06, 2015 | 0 Comments

Investing in a Franchise

Investing in a FranchiseInvesting in a franchise can be a very wise and lucrative business choice. However, it is important that you have a clear understanding of what is involved in such an investment. From the outset it is a good idea to work with a Bryan business attorney as you determine which franchise to invest in.

Advantages of Investing in a Franchise

Franchise businesses have distinct advantages over new enterprises for several reasons. First, there is a proven track record for that company. You know at least that the business has been successful elsewhere. Moreover, the operating procedures have already been largely set in place. While there may be some room for flexibility, most franchises are expected to operate largely in a way predetermined by the parent company. For a first-time business owner, then, investing in a franchise can be less complicated a matter than opening a business of your own.

Determining which Franchise Is Right for You

As you decide which franchise is right for you to invest in, it is important to make a realistic and thorough assessment of yourself, the business, and the area where you plan to open the business. The following steps are useful tools to this end:

  1. Consider your skills and background. What experience do you bring to this undertaking that will suggest one type of franchise over another.
  2. Decide how much you can afford to spend on your investment. You need to be realistic about this, and be able to come up with enough capital to open the business and keep it running for a time without a profit if necessary.
  3. You most likely have a few franchises in mind. Conduct research on the fees and start-up costs that each one carries. It is important to keep in mind that this amount can differ substantially depending upon the franchise you choose.
  4. Analyze the failure rates for each of these franchises. It is important to take into account the company as a whole, for individual failures can be attributed to problems related to the owner, such as lack of experience. If a particular franchise has a high failure rate, you should consider this a red flag.
  5. Assess the geographical location where you want to open the business. Are there already other businesses of this type operating in the area? How many? How well are they doing?
  6. Obtain any business loans necessary for purchasing and starting up your franchise.

For Answers to Questions and further Information

If you are planning to invest in a franchise business it is important that you work with a Bryan business attorney. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.

About the Author

Chris Peterson

Chris Peterson is the owner of Peterson Law Group. He practices primarily in the areas of wills, trusts and estate planning; probate and trust administration; elder law; and business law. Chris is also the owner of Brazos 1031 Exchange Company.


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