Today, there are a number of franchise businesses for sale in the market. Which one of them you will buy will depend, to a large extent, on money! Yes, the “root of all evil” is a spoiler here also. But the good news with franchise is that there is something for everyone – from people starting with as low as $25,000 dollars to people who can invest up to million dollars. So, what are the questions that should be there in your mind when you go out to buy a franchise? Here are some of them:

1.How much of an investment do I have to make? It should include the start-up cost and the cost required for the running of the franchise as well as your home. No one can give a correct estimate of the amount. The best is to calculate all the costs individually and add some 10 to 25% extra to it for emergency purposes in order to arrive at this figure.

2. What is my start-up cost? This is a question you will have to ask the moment you go to buy a franchise. It is the franchise fee, real-estate and other costs that you have to bear in the beginning of your journey as a franchisee. The details of the break-up will be there in the franchise agreement and the UFOC and most top franchises will think twice before considering you, if you cannot muster up this amount.

3.What is the running cost till the unit breaks even? This is another important question, as even if you manage the start-up cost but don’t have a working capital, you cannot run the business smoothly till it starts to profit. This is something you should ask your franchisor when you are starting a franchise under them. The Best franchises who know how to franchise usually carries out detailed market study before giving any kind of projection. So, make sure your franchisor is one such franchise.

4. What will be my living expenses? Another money question that you will have to ask yourself. And sometimes, your franchisor may also ask you this in order to find out how much money you can spare for the business. If you take money from your business to run your household, then you will be robbing Peter to pay Paul! Therefore, separate the two accounts when you are starting a franchise.

5. Where I will get the money? Another question where you have to sit down with your accountant, franchisor and family members. You may have the money from your savings, SBA-backed loans, loans from family members or some other sources. If you want, you can also take loan from your retirement fund through IRA or 401(k) plans. Also, make sure you take help of financial advisors like Guidant Financial Services in this matter.

6. How much money can I make and how fast? The most important reason for starting the franchise – the profit off course! But have realistic expectations from the business, even if you have joined one of the best franchises in the market. Never think that there’s a magic wand and you can earn handsomely without working hard. The opposite is also true. If the market and the franchisor don’t support you, you may not make that much from the business, despite giving your best. You must also keep in mind that some businesses make quick-earning, but tend to dry up later while others are slow-starters but in due course, turn out to be immensely profitable ones.

Need help finding franchise finance? Contact The brandEXPANSION Team to learn more.