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Posted by Jennifer Hendrickson on
As we talk to clients who are considering going into business for themselves, many have never thought about buying a franchise. Some are so convinced that franchises are out of their league that they don’t even want to talk about the possibilities. When one thinks of franchising, their thoughts may automatically turn to the “golden arches” or some other fast food concept and the millions of dollars that seem to be required. As a franchise owner myself, I can tell you that there are many franchise opportunities out there, in every conceivable industry, for much less than you’d ever imagine possible. Consider the following:
- Under $120,000 in available cash. Although there are franchises that require more than this, the typical franchise buyer has under $120,000 in available cash.
- You don’t have to be a millionaire. The typical net worth of a franchise buyer is $250-$600,000. There are many that require much less than this. Add up your home value, your retirement accounts and real property, and deduct your debts. This will give you a rough idea if you’re in the neighborhood.
- IRA/401K are a funding option. Many franchise buyers have IRAs and 401Ks that can be used to help fund some of their expenses. We can introduce you to qualified providers that specialize in leveraging retirement plans.
- The average age 35-50 years old. Is this younger or older than you thought? Actually, many franchisors prefer working with those who still have many years left in their working career.
- Prior business ownership is not required. Most franchise buyers have never owned a business before. A growing number (roughly 30%) have owned before and bought a franchise the second time around for the ongoing marketing, training, and support they offer.
- Corporate work experience is typical. The vast majority of franchise buyers have previously worked in a corporate environment.
- Franchise buyers are looking for options. Corporations are sometimes more concerned with their stockholders than they are with their employees. The opportunity to stay with a company until retirement is almost non-existent.
- Franchisors pay our fees. If you’ve ever sold a business or even real estate, you know that sellers often pay the broker fees. In this case, the franchisors pay us from their standard franchise fee.
If you’d like to know more about the franchise opportunities available through Murphy Business, contact us. We can help as you navigate through the sea of franchises to find one that’s right for you.
Some information above was taken from the IFA’s twenty-year study on the “Typical Franchise Buyer”.