What You Need to Know Before You Buy a Franchise
The franchise business is growing in value and profits on a yearly basis. A lot of people are looking to invest. While investing in a franchise is bound to bring in significant profits, the amount of time, effort and money you’ll have to invest to make it profitable is not insignificant. If you are looking to buy a franchise, there are a few things you will need to know. One of the first things you may be wondering is, what are the best franchises to own?
The number one franchise in terms of popularity and profitability is real estate. Coming in at a close second is senior home care services. Senior care services are the fastest growing industry worldwide. These franchisees earn an average pre-tax income of $123,000 per annum. As this is an average, some of these franchises can earn less than this, while others end up earning far more.
What Can I Earn?
How much money will you get after you buy a franchise? A good way to find this out is to speak to franchisees working in a brand you’re interested in. It is also important to review the franchisor’s Franchise Disclosure Document. Most franchises’ FDD will include item 19, which informs you about the franchisor, the franchise system, and what you are agreeing to by your investment. Not all business will have an item 19 however, those exempt usually being newer franchises.
One thing to be aware of is that most franchises in their FDD will list the gross sales of the franchise, not necessarily their profits. While this cost is particularly low in senior home care, one of the major expenses you’ll be looking at in terms of your investment will be for equipment, supplies, labor, rent, marketing fees, royalties and more. This is one aspect of the benefits of the senior home care franchise, as the expenses for supplies and equipment are minimal.
Another expense you’ll have to account for is your own salary. It is common for franchisees to not take a salary from the business in the first year, so you’ll have to ensure you factor in your living expenses if you don’t have another source of income to cover this.
Funding Your Franchise
The cost of investing in a franchise can range from as low as $10,000 to as much as $100,000. This depends entirely on what franchise you’re investing in. The senior care franchise is expected to cost between $90,000 and $300,000. Home care franchises usually rest in the lower price range.
If you’re wondering how you’ll be able to fund such an investment, a loan is the most common option. Some may consider it a challenge to get a loan, but you will have the franchisor on your side to vouch for you. This will go a long way towards getting a loan approved for the amount you need.
What can senior care franchises expect to make per annum? Here is the answer, based on a survey by Franchise Business Bureau of over 1,700 senior care franchisees representing 18 different brands.
Percentage of senior care franchisees earning over $100,000:
- 42% make over $100,000
- 20% make over $200,000
- 14% make over $250,000
However, when you buy a franchise in senior care, there are more than just the monetary benefits to consider. You are actually delivering a community service by your contribution to and involvement in senior care. Ensuring the elderly are happy and looked after is integral to a functioning society.
A Better Solution in Home Care
A Better Solution In Home Care offers franchising opportunities that aim to exceed a successful business opportunity and provide care for seniors. Contact us today to learn more about our difference, and the opportunity you can achieve.