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Buying a business can be hard work even if that business is a franchise. Buying a business services franchise has become one of the most popular and profitable methods of business ownership but it still requires careful consideration, planning and evaluation before taking the plunge.
Business services franchise opportunities have become even more popular with downsizing trends, the growing rate of small business owners seeking to outsource everything from payroll services to advertising, and of course, the need for cost effective short term help. However, not all business services franchises are equal, so depending on your individual situation, certain small business franchises may provide a better “fit” for your individual circumstances.
For example, if you have minimal marketing skills but a particular franchise has a well established reputation in your area, then higher advertising rates may be perfectly acceptable for your specific situation. Likewise, if you have a strong history in a given industry then a lower cost franchise that has been in business fewer years may be a great way to save money while retaining the support and expertise of a franchise.
Use these seven steps to evaluate and compare your business service franchise options.
1. How long has the franchise been operating?
2. What is the average number of outlets per franchise owner?
3. What are the anticipated annual revenues?
4. What is the franchise fee and other initial costs?
5. What is the royalty rate?
6. What is the advertising rate?
7. What are the license agreement terms?