Market factors

Investing in franchises under 100k and buying a business model and an area or territory is a very popular way to get into business and grow not only a successful but large and well recognised brand.

The instant recognition creates a simpler method for attracting new customers or clients or promoting your services, providing a predictable income due to the size of the recognised brand you have purchased.

An example of those over 100k might be a large well known fast food brand with a specific location already set up and huge population and varying demographic ensuring the business is a success.

These will likely be ones over 100k although there are smaller versions under 100k offering smaller business models. The size of the investment level differs, the ongoing hiring of staff, wages and food delivery volumes set these businesses apart.

It is the location and the usage and patronage from the local community or territory that almost guarantees the success of these businesses, as the operation manual are so in depth that these businesses rarely fail.

People who buy these over 100k will pay a premium for that assured success. Have you considered franchises that cost more than £100,000 in Bristol or those that cost more than £100,000 in Edinburgh?

People who invest in them over 100k would be looking at fitness or food or specialist building suppliers and service providers as an example. Some of them are priced reasonably, those under 100k but the set up costs, leases and the overall expense of getting the business to the opening or launch day can increase the amount required way beyond the initial fee.

The best franchises over 100k often require a specific square footage location like a major shopping centre where a lease would be required and negotiated prior to the business launch. These businesses tend to cost a lot more but turn over a lot more business and generate a higher profit.

Royalty fees

Most do fall below 100k, and equally under 100k and over 100k frequently requires additional leases and minimum staffing levels.

The opening and closing hours need to be considered along with the fee or royalty fee that has to be paid back by the recruit to the master franchisor as part of the agreement. If you invest in them then this royalty fee is usually based on a percentage of the turnover.

But remember this percentage is paid on the gross turnover often monthly or quarterly but is paid from the net of what is left over after the operating costs.

This can at times look expensive after all the costs, stock and staff wages are taken care of. The advantage of buying over 100k is the depth of support often provided and the backing of a national brand with a well-known product and logo.

There is often a national advertising budget provided by the franchisor as part of the overall package. Other ones though, may have a requirement for you to pay a monthly fee towards that package which could add additional costs.

If you are looking to invest, whether you are looking at those under 100k or the best over 100k, start your search here with Approved Franchises.

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