Tom’s Franchise Information Blog

Subway, McDonald’s, Hooters, H&R Block, all names we are familiar with as they are some of the most popular and well known franchises available. They, like most franchises have very successful brand names, but what about the other 3000 or so that you don’t know?

What we are attempting to do when buying a franchise is buy the brand and the business plan that comes with it, sounds great right? Well often it can be, as franchises do have higher success rates then the average mom and pop business. Unfortunately not all can be successful and they do come with risks often higher, especially in regards to capital invested.

This is the classic issue that most new business owners tend to overlook. What if it doesn’t work? There is no guarantee that a Subway will succeed, no matter what other subway owners or area developers say. Some do fail, so when you look at lesser know franchises, especially operations franchising less than five years be very very careful.

Franchises are like a big brother of sorts, they help “plow the road” for you, give you a name to be associated with and sometimes a helping hand when you need it most. But what most of us fail to consider is it worth the price of the franchise fee and the other “hidden” costs that go with it.

Franchise fees are a huge part of the start up costs of a business, some run into the hundreds of thousands. Most franchisers want that money as fast as possible and may even take a part of your revenue. Can you sustain your business AND pay this fee? You must as a start up franchise truly factor this into your operating costs, as most franchisers want this fee in good times or in bad. Often in the franchise agreements they state they have right to draft funds from your bank account, you give them this right.

So please read carefully and consider these fees when first starting out. Also the costs of starting out can often be higher as many franchisers require you meet certain standards for location. Having to pay rent in a high traffic location due to franchisers requirements puts a huge burden on a start up in that critical first year. Before you start any franchise please consider them as you would consider any business, don’t get to caught up in the name or idea no matter how popular the brand is.

Besides writing articles online Dan also creates informative and helpful websites. You can check out his latest website on direct loan consolidation and direct loan servicing, helping both current and former students make important decisions about student loan consolidation.