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Franchise owner salary – how much is it

Though you may want to own a franchise because it allows you to be your own boss, set your own hours, and call the shots, the money is important, too. All franchisees want to run the most profitable franchise possible. Franchisees often enter into the franchise agreement with an idealised view of how things are going to turn out. In many cases, they don’t realise that running a franchise is a tough job and that it can take a serious amount of time for you to begin to turn a profit. Then comes the issue of how much you should pay yourself.

How long will it take for you to earn an income?
How long is a piece of string? It’s difficult to know how long it will take for a franchise to turn a profit. Most franchises will be able to provide you with a rough estimate, but this will be a guestimated average rather than any concrete figure. There are an incredible number of factors that could influence the amount of time it takes to turn a profit and the vast majority of them are far beyond your control. They include market conditions, the amount of work you put into the franchise, your franchisor support system, and blind luck. Though most franchises will be profitable within the first year, this isn’t always the case, so make sure you stay patient and don’t give up too easily.

You’ll lose money at first
However, we can be sure of one thing – you won’t be making any money in the first few months and you’ll definitely be losing a fair amount as you invest in the business. This means that you’ll need to have some savings to keep you going until you do start turning a profit. This situation is only exacerbated by the fact that many franchises are likely to be operating on a 30-day invoice system and many businesses are notoriously slow at paying. In order to ensure that you’re secure for the foreseeable future, you’ll need to calculate how much you need to comfortably live on. This amount will vary from person to person, as we all have different needs and a different definition of what constitutes ‘comfortable.’

What’s a comfortable amount to live on?
The best way to calculate how much you need to survive during this period is to create a record of all your living expenses. Start with your daily expenses, then move up to weekly, monthly, and annual. It’s important to consider all your expenditures, particularly those that are vital to your financial and family security. These might include mortgage payments, university tuition fee savings for your children, or finance payments on the new car you just bought. Likewise, it’s essential to consider the little extras and luxuries that soon add up. Unless you’re capable of living a life of complete solitude, you’ll have to factor in the occasional meal, drink, or trip to the cinema, too.

Do your due diligence
Due diligence is an essential part of the franchisee preparation process. You should never sign an agreement without having calculated the franchise cost, how much you can expect to earn from the venture, and whether the franchise is a financially viable investment opportunity. Your due diligence should also provide you with a vague approximation of when money should start coming in. Though this approximation will be largely determined by financial information offered up by the franchisor and franchisees, it should allow you to plan and prepare for turning a profit.

Average salary of franchise owner
At the start of your franchise ownership, you will have most likely drafted a business plan with the help of your franchisor. This will set out short and long-term goals, as well as what will happen with the money you make from the franchise and where you hope to be in five or ten years’ time. You may also have crafted your own plan. Your stated aims can have a big impact on when you can expect to start paying yourself a wage and how much it will be.

For instance, if you’re planning on building up the franchise from nothing and then selling it at a profit, you’ll need to think about maximizing the value of the business when you present it to a buyer. This may mean taking less of an income out of the business. Similarly, if you’re planning on building the franchise up over a number of years, you may want to draw a smaller income and leave money in the business for reinvestment. However, if you’re hoping to get rich quick and make as much money is as short a period as possible, you’re probably best taking as much as you can from the franchise profits, as soon as you can.

Tax and NI
Tax and National Insurance contributions can have a big effect on what salary you draw. In most cases, the various tax calculations are too complex to cover in any detail here. Consequently, it’s advisable that you seek financial assistance and guidance from your accountant or financial advisor before you make any decision about the precise amount you take as income. What you end up paying in tax is likely to vary according to how you set up the franchise and whether you’re acting as a sole trader, partnership, or limited company.

Conclusion
How much you choose to pay yourself as a franchisee will largely depend on your specific circumstances, goals, and long-term plans. There’s no way of calculating when your business will begin to turn a profit and it’s completely up to you how much you decide to take once it does. However, it is a good idea to ensure that your salary reflects your long-term aims and objectives. It’s also a good idea to consult a financial advisor and get an expert opinion. Taxation can have a big impact on how you decide to pay yourself and it’s many complexities deserve the attention of a trained and qualified professional.

What are franchise fees and royalties

Technically, a “franchise fee” is the upfront cost associated with obtaining use of the franchisor’s mark (its name/logo/mark) as well as numerous sundry items such as initial training, set-up, and so on. In other words, the franchise fee is the initial cost paid by the franchisee to join the system.

Now, some may refer to “ongoing fees” as franchise fees, but those are rightfully termed “royalty fees”. The “royalty” is paid (usually on a monthly basis) either as a flat fee or a percentage of sales. Almost always there is an ongoing (royalty) fee paid to the franchisor, and hopefully there is real value in ongoing support services received in return. The franchisor’s offering circular describes the nature of the fees as well as what services (or items) the franchisor is obligating itself to in return for the fees paid.

In the language of franchising, when you use the phrase “franchise fee,” most insiders understand that to be the initial check you write to the franchisor when you sign your franchise agreement. It’s the cost of joining the system and is usually a fairly large flat fee.

My sense of your question, however, is that you’re really referring to all the fees-and there can be many. The principal fee in franchising-other than the franchise fee-is the royalty fee or, in some systems, the continuing royalty. This refers to the checks you’ll send to your franchisor on a routine basis throughout the term of the agreement. You pay this for staying in the system. While it varies from franchisor to franchisor, the royalty is typically calculated as a percentage of your sales. You may be required to send the payment each month, each week or on some other regular schedule to the franchisor. Many franchisors today don’t even need you to send them a check. When you sign the franchise agreement, you give them permission to reach into your checking account and wire transfer the payment directly to them.

Before I get mail from some franchise purists, the other routine fee is usually the advertising fee. This is the payment you’ll likely make on the same frequency as your royalty payments and also as a percentage of your sales. While we call it a fee, and it is money out of your pocket, practically speaking it isn’t really a fee. The advertising fee is almost always a contribution you’re required to make to an advertising fund that the franchisor manages for the franchise system. The franchisor customarily uses the fund to create advertising and marketing materials or, in some cases, to actually place the advertising and often to reimburse itself for the costs of administering the fund.

Now that we’ve identified the two principal fees-the franchise fee and the royalty fee-why are you paying those two? Simplistically, you pay the franchise fee for the right to join the club. The franchisor won’t let you into the system unless you pay him the initial fee. You pay the royalty each week or each month to stay in the club. In most well written franchise agreements, that’s actually all you get-entrance and continual access.

To determine what you’ll receive from the franchisor, you need to read the written franchise agreements closely. Remember, in franchising, as in most other contractual arrangements, you only get what your written contract says you get. If there’s something your franchisor said they’d provide that’s important to you, and it’s not in your written contract, have them amend the contract. They may not be legally bound to provide you that service if it’s not in the written agreements.

Also essential to remember: Don’t ever-ever-invest in a franchise without the advice of an experienced franchise lawyer. Franchising is a specialty area in the law and, most general practitioners may not have sufficient knowledge to decipher a franchise agreement. Also, and maybe even more important, don’t ever accept the advice of franchise brokers. They may act like your friends and even refer to themselves as “franchise advisors or consultants,” but they don’t work for you. They work for and get paid by the franchisor only when you buy a franchise. They have a bit of a conflict when it comes to giving you advice.

5 reasons to focus on long term gain

You’ve surely heard the old adage, “No pain, no gain.” While normally applied to physical activities, it can also apply to starting your business in the midst of a recession. There will be pain–but the long-term benefits far outweigh the short-term.

Already, there are signs that the freeze of our current economic winter is starting to thaw, and the reality is that six percentage points of decline in GDP is not a 50 percent decline — no matter how the media wants to peddle the numbers.

It’s time to get over the fact that things are slow and get on with what you need to do now to enjoy the fruits of the economic spring and summer that will be here soon.

So why should you focus on the long-term gain of business ownership versus the short-term pain of the current recession? Let me count the ways:

1. Business is still the best wealth-building vehicle ever created.
You could get rich working for someone else, but the numbers are against you. Using the new definition of “rich” (meaning an annual income of $250,000 or more), you could count on one hand the number of actual salaried positions that could pay you that amount of money — and that salary number is typically capped, unless you can tap into a bonus pool.

However, running your own business offers you an opportunity to grow your income as much as you possibly can. There are no limits to the types of revenue streams you can develop in your own enterprise, and there are tax advantages you have as an owner that simply aren’t available to you as an employee.

2. Business allows you to leverage your greatest strengths — and overcome your most glaring weaknesses.
In running your own company, you’ll soon discover you can’t do it all; you’ll need to develop systems and tools to make everything work. This will force you to think differently about your skills and abilities and how best to setup an environment that is at all times productive, efficient, profitable and systemized.

How do you do it? Learn from the hundreds and thousands of “how to” materials available online, in your library or in your current network of associates and friends.

I like to say there are no secrets — just information you don’t know yet. And if your weakness is learning, being accountable to yourself and others or understanding how to sell or get leads through your door — you will soon discover you will absolutely need to overcome those constraints…or you won’t be in business long.

3. Recessions are short-term. Recoveries are long-term.
I often say there is more money made in a down-turn than is ever made in a boom — and that’s because the good companies in a recession soak up all the mind share, market share and, more importantly, wallet share of weak companies. They also enjoy the “ride” coming out of the downturn, because recoveries historically tend to last four to five times longer than any recession.

In any market economy, the short-term pain is just that: short-term. But the benefits of working out the fundamentals and getting your business model right will give you security and profits for the long-term, and will equip you with the learning needed to get “lean and mean” when the cycle slows again.

4. Great successes are often achieved by “doing the opposite.”
There is a famous Seinfeld episode where the hapless George decides to do the opposite of what he has always done — and finds it leads him to great success.

The fact is, you’ll never get abnormal results by being normal and if we are to use the $250,000 benchmark again as an example, less than 5 percent of the population currently makes that kind of money.

In the old “bell curve” you probably remember from school — that 5 percent outlier would be an abnormal result, and the remaining annual incomes would comfortably settle in the middle around the average or median score.

To break out of normal and average, you need to do something exceptional that others aren’t doing. Part of that is getting the right mindset. Right now, the “normal” mindset is “doom and gloom,” waiting for someone or something to come up with some great solution to solve all economic ills.

Decide right now to “do the opposite” — by realizing the only person who can cure your economic illness is you. Then resolve to do everything in your power to start producing “abnormal” results.

5. Business is one of the most creative endeavors you could ever undertake — or attempt to master.
People look in awe at artists and what they are able to create. But in some ways, successful business people are far more artistic and creative than most people could ever imagine.

Think about it for a minute. Great entrepreneurs take invisible ideas, turn them into tangible products or services, fulfill the needs and desires of their customers, hire and employ tens, dozens or thousands of team members to assist them and live to profit another day.

There are few things more purely creative than that.

Mastering that process, however, is an entirely different endeavor. And after more than 30 years in business with some awesome successes and some fairly massive failures, I am still learning, growing, improving and striving to master my craft.

There is no end or limit to the creativity, artistry or opportunity of business ownership and the process will give you more insight into others and yourself than you could ever imagine.

In the end, it doesn’t matter if you start slowly or start big, the key is to start. Get over your hesitation, stop your procrastination and get moving.

5 unconventional ways to fund your franchise

As traditional funding sources dry up, franchisees have to get creative. Fortunately, reliable strategies aren’t being kept secret.

It’s been said many times, “Necessity is the mother of invention.” The credit crisis has made funding a new franchise much more difficult, but you needn’t give up hope. If you research your options and explore the new programs being offered by some franchise companies, it’s possible to find innovative approaches that can help solve this issue–even in today’s market.

The fact is that franchise companies still want to grow; and many individuals are still chasing the American Dream. Both groups realize that the lack of available credit is hampering their ability to make this happen. Solutions exist, but they often require some out-of-the-box thinking and aggressive efforts on everyone’s part.
Some franchises are taking a proactive approach by developing nontraditional funding for new and existing franchisees to use while they’re waiting for the market to rebound. In addition, many prospective franchisees are taking an alternate approach to find a solution for their own funding needs by using assets and sources they might not have considered in the past.

These efforts have created a number of alternative funding options or strategies, five of which you should think about:

Direct financing: Some franchise companies now provide direct financing to their franchisees. This often takes the form of accepting a promissory note for part or all of the initial franchise fees owed. But it can also involve more extensive lending if the franchisor is financially strong enough to provide such a program. These types of programs are rare but becoming more common. Be sure to ask any franchise company if any such direct financing plans are available now or contemplated for the near future.

Third-party lenders: Other franchise companies have arranged indirect financing or leasing programs for their franchisees with third-party lending vendors. In some cases, such programs require the franchise company’s guarantee (something they normally wouldn’t do); but if that’s what it takes, then many are agreeing in the current climate. This is another potential funding area that prospective franchisees should explore.

Angel investors: Still other franchise companies are exploring angel investor programs to attract additional funding sources. These sources are individual or corporate investors looking for upside potential to increase their returns. These types of loans typically require an equity participation “kicker” as part of the overall package. Though such a provision may end up making the loan more expensive, it may be the only viable option available to the prospective franchisee. This is also an approach a prospective franchisee may pursue if his franchise company hasn’t.

Low-cost franchises: Individually, one of the strategies that many are using right now is to focus on lower investment franchises. There are many service or B2B franchises available with a lower initial investment than the typical retail or fixed-location startup. If you can find a franchise that meets your income goals and needs for less than $100,000, then you may be able to fund the investment completely from available cash, thus avoiding the need for sourcing any additional funding.

Savings: Other prospective franchisees are accessing their retirement plan dollars to invest in their franchise. Especially given the stock market performance over the past year and the lack of confidence that many feel about its potential in the next few years, investing these dollars into a business that’s under your own control has more appeal than ever. This strategy uses a self-directed IRA and carries a big caveat: any such program be set up with all of the correct legal and IRS requirements. There are specialists who can assist you in setting up this type of program; you need to have such competent assistance to make sure it’s done properly.

Though these ideas stray from the traditional lender source programs that prospective franchisees have relied on in the past, they’re reliable tactics to get a cash advance. Those standard programs will certainly come back as the credit availability cycle stabilizes, but if you want to pursue financing in the meantime, you may have to get more creative.

How to Create a Franchise Business Plan

As with starting any new business, creating a business plan for your franchise is a critical step in the buying process. This plan will outline the expectations of your new business as well as help you think about and prepare for the challenges you may face. And if you are looking to secure financing for your new franchise, most lenders will require you to show them a business plan.

The good news is that a lot of the legwork will have already been done for you by the franchisor versus developing a business plan for a startup from scratch. Most of the financial information you will need can be found in the franchisor’s Franchise Disclosure Document (FDD). But there is still work to be done. There are a variety of templates available for developing a business plan, but here we outline the top six sections that should be included:

1. Executive Summary
The Executive Summary portion of your franchise business plan should describe your business’s purpose and goals. Begin with a short description of your product or service and list your objectives. How are you fulfilling a hole within the marketplace? What is the growth potential? Outline how your business will succeed and achieve its goals given the market and competition.

2. Business Description
The next part of your business plan will be a thorough description of the franchise business. Item 1 of the FDD provides an overview and history of the franchise. A rundown of the products and/or services offered, an overview of the market and competition, an explanation of the operations process for delivering goods to the consumer, and a summary of the risks and challenges should also be included in this section.

3. Management Summary
The next part of your franchise business plan should include a listing of the key members of your management team who will be an integral part in the day to day operations. Include as much background information and prior experience as possible for each member focusing on items most relevant to the franchise business.

4. Sales and Marketing
In franchising, sales and marketing tactics are largely dictated by the franchisor. You will need to research their process for targeting new customers and include an explanation of the marketing and advertising support offered to you by the franchisor. How will they get the word out about your new location? What types of ongoing advertising campaigns do they provide? Talk to the franchisor about how much leeway individual franchisees have in local marketing and advertising and include a plan for your specific unit to show how you will drive customers to your business.

5. Financial Projections
Item 19 of the FDD outlines the financial performance of both franchised and franchisor-owned units but keep in mind that profitability can vary from unit to unit. Many variables go into predicting profits for an individual franchise location including geography, sales volume and management. Look to the franchisor to help guide you based on similar units and talk to other franchisees. Remember, it’s better to err on the conservative side when making financial projections.

6. Financial Needs
Your financial plan should include three key items: a profit and loss statement (P&L), balance sheet and cash flow statement. A lot of the information you need for this section can also be found in the FDD including Items 5-7 which list startup costs and estimated initial investment. It’s important to research any ongoing fees and royalties that may be required of you as well, and ask the franchisor about any other costs that could possibly arise during your first year of operation. How much operating cash will you need to have on hand? How long before your location is projected to turn a profit? All of this information should be analyzed and included in your business plan to ensure you have enough capital to successfully launch your business.

There is no exact formula for developing your franchise business plan but these key elements are fundamental. Remember that your business plan is essentially a sales document and should demonstrate how and why your business will be successful.

12 Mistakes franchisors make

In these tough economic times, franchising is the solution to support small business people. According to the Franchise Association of South Africa August 2017 survey statistics the estimated turnover for the franchise market is R587 billion Rand, which is 13,3% of the South African GDP. In total, some 20 000 people are employed by franchisors, while 323 592 are employed by franchisees.

However, the franchise sector’s reputation is suffering due to the bad behaviour of a few brands and if it continues on this current path, franchising might not exist in the future and impact our economy dramatically.

12 Mistakes Franchisors make:

Franchisors don’t listen to franchisees
Franchisors assume franchisees are making more money than they actually do
Franchisors become greedy and try to make too much from franchisees
Franchisors don’t communicate effectively
Franchisors don’t offer an ongoing constructive training programme
Franchisors accept rebates and kickbacks with no benefit passes on to the franchisees
Franchisors underestimate the power and intelligence of franchisees

Franchisors do not have good franchisee selection criteria and sell a franchise to unsuitable franchisees rather than award a franchise to suitable franchisees
Franchisors don’t review the franchisees’ financials and carry out benchmarking
Franchisors don’t help the franchisees develop a business plan
Franchisors over promise and under deliver
Franchisors are inconsistent in the way they treat franchisees
what would world without franchising look like 1What would a world without franchising look like

Franchising allows people to be in business for themselves but not by themselves – without this proven business model and systems they will be left battling it out all on their own
Franchisees will lose the access to the tradename and established brand. They will need to create their own independent brand and regain the acceptance of the public and local community, this might take a long time.

Management services fees wouldn’t exist anymore, but it also eliminates the support from field service consultants and the support office. Franchisees will have to deal with issues independently and won’t have access to benchmarking data to measure their business performance against. External consultants would need to be contracted to assist when need be
The current system being used in the franchise network will no longer be accessible

Franchisees would need to negotiate individually with various suppliers and they won’t be able to unlock the deals the franchise network acquired due to bulk discount arrangements.

Retail management centres won’t have the guidance and support from franchisors on standards, therefore franchisees are left to their own devices with regards to store image, customer service and product quality, etc.
Franchises tend to be more compliant to tax obligations due to strict Consumer Protection Act regulations and requirements. Franchisors ensured that franchisees declared information and kept accurate accounting records to ensure the safety and compliance of the entire network – small independent businesses might not be as inclined to adhere to or remember all these requirements.

Franchisees would no longer have guidance from the franchisor with regards to pricing structures, they can now set own pricing to their advantage or own detriment
Advertising will be entirely up to the franchisee, they have to produce and distribute their own content locally. National brand building initiatives will no longer be available unless they have the means to pay for it.

Franchisors will lose the owner operator factor which has been proven in various brands to have increased sales by between 20-30% – therefore sales will decrease dramatically even if all stores are retained as company owned stores
Franchisors might not have enough capital to sustain and manage all the previously franchised stores, thus leading to a closure of stores in various locations, especially remote or outlying areas where they have less control or supervision. If stores close down, then it will increase the unemployment levels dramatically
embrace positive franchisingEmbracing positive franchising

The public should be educated that franchising is a solution to our current economic condition, not the problem
Create solid support structures to ensure the success of the network
Franchise relationships should be strong throughout the network
The franchise model should be up to date and relevant to current market conditions
Franchisors should review the health of their franchise network
Franchising should be a win-win scenario for all parties involved

Treat all franchisees the same
Franchisors should always under promise and over deliver
Franchisee selection is critical – don’t set someone up for failure
Listen to your franchisees – if franchisors listen to franchisees this will resolve so many issues internally
Training is key – offer an ongoing constructive training programme

How and Why To Identify Rising Talent

Many owners remain as the only key manager in the business and fail to develop people under them who have actual leadership capabilities. This sort of hub in spoke structure, inhibits growth and organizational longevity because eventually the business grows beyond the capacity of the owner, and there is no bench for when the time comes to transfer leadership. This does not mean that you are giving up control of your franchise operations before you are ready. Instead, it could mean freeing yourself up to do more to grow the brand and your portfolio.

If as an owner you hold the reigns too tight and have not worked to identify and develop your successor or leadership bench strength, it’s time to call a spade a spade and get to work. Depending upon the maturity of your business, you may be required to conduct a talent search; otherwise, if you have the time, look inside your business for leadership potential. In either circumstance, here are six key indicators (the 6 C’s) to evaluate when identifying next generation of leaders:

Capacity
The growth potential and versatility in an environment of continuous learning and adaptation is one of the core components of identifying rising stars. There are seven specific characteristics to evaluate potential leadership candidates – they must either already possess, or have the capacity to learn:

Intellectual capacity – to effectively understand, manage, oversee, and make decisions pertaining to the unique body of knowledge important to the business.

Big picture understanding – the ability to see the organizational “big picture” which enables the successor to multi-task and effectively work with a diversity of managers, employees. and vendors, all of whom bring different talent and perspectives to the organizational processes.

Social versatility – the capacity to develop and maintain interpersonal relationships with individuals critical to the success of the business.
Patience – the ability to patiently take the steps necessary for leadership growth, knowing that over time they will receive increased responsibility.
Collaborative mindset- the ability to work as a member and a leader of a team.
Influencing others – to gain respect and leadership skills to favorably influence those who are critical to the continued success of the business.
Coachability – the willingness and ability to be coached from the experience of others.

Commitment
Next generation leaders, and specifically someone who would take on the owner’s role, should have enough passion for the business that they are willing to be a role model and think like an owner. This means throwing their unreserved commitment at the business.

Character
One of the fundamental roles of a future leader is the ability to lead and motivate. Core beliefs and practices influence the organization and they convey trust and respect (or lack thereof). Positive character of your future leader is critical to ensure that your team is led along a consistent and compatible path of ongoing success.

Competence
A person you are evaluating for a key leadership role, and specifically your successor, must have the intellectual ability to know what is critical to the business as well as being self-aware. This positions them to not only assemble the right team, but also address all essential and complex components for achieving long-term business goals.

Confidence
It is important for both you as the franchise owner and developing leaders to recognize that you will become partners during the development process. Solid relationships built on trust and confidence will ensure a smooth and successful transition of leadership.

Community
In addition to developing leaders who are owner minded, they too must be community minded. They must be team players who have at heart the best interest of all parties dependent on the ongoing continuity of the business.

No matter where you are in your career as an owner, it is important to identify your rising leaders to ensure the sustainability and growth of your franchise operations, including your successor. If you are developing people to take over your role in whole or in part, you then have the opportunity to continue to grow as an entrepreneur. While the 6’s C’s are attributes every rising leader and, specifically your successor should be evaluated against, it is not critical that they are “perfect” in each area. What should be expected is that your rising stars or next generation leaders are not totally blind, ignorant, unconcerned, or apathetic about their weaknesses.

Analyzing the 6 C’s is the first step in identifying your next generation of leadership. The next step is to understand and identify the management style that will work with you and your organization. In our next installment, we will dig into how to be an effective manager and tackle what works and what doesn’t for you as the owner and the overall culture of your multi-unit franchise organization.

Fitness Franchise Options

Market demand for fitness franchises is strong. One out of every five Americans is paying for a gym membership. Finding success as a fitness franchise owner will hinge on finding the business model that works best for you and your community.

While investigating fitness franchises, you’ll quickly notice there is one that meets virtually any need. Below is an overview of some of the most common offerings.

Circuit Training
Circuit training franchises offer members workouts that entail short bursts of resistance exercise using moderate weights and frequent repetitions, followed quickly by another burst of exercise targeting a different muscle group. Typically, a few trainers are on-site to keep members motivated and routines change daily, so members don’t get bored with their workouts.

Yoga, Barre, Mixed Martial Arts, Pilates, and Boot Camps
Since limited equipment is needed for these franchises, they can sometimes be run out of a loft like space as small as 1,300 square feet. Some boot camp style classes, if they use simple equipment such as bands or jump ropes, can be held outside in parks or at inexpensive locations including rented spaces within community centers or churches.

Spin
Stationary bikes are the biggest equipment expense for spin fitness franchises. Many treat members to state-of-the art sound systems and visual stimulation in a dark room while others have simpler settings.

Traditional Gyms
Even though it may seem that the fitness landscape is being dominated by specialized offerings, many people still enjoy doing a traditional gym workout. Traditional gyms are also increasingly incorporating specialized offerings into their mix. Some only feature a variety of machines and weights, while others may also have an indoor swimming pool, aerobics rooms, saunas, hot tubs, a blow dry bar, a juice bar, a massage center, and more. Those that offer bare bones facilities typically charge low monthly fees and bank on members not coming, but continuing to pay their fees. High-end gyms tend to have a spa-like feel when it comes to atmosphere and details such as fluffy towels and luxury shampoos and soaps.

Kids Fitness
With school budget cutbacks resulting in gym being eliminated in some schools and parents knowing the benefits physical exercise offers kids, there is an increasing demand for kids fitness franchises. Some focus on a specific activity such as gymnastics, dance, or soccer, while others offer a variety of options. The benefit of those that focus on a particular type of class is that they provide expert training. The downside, however, is that when the child wants to try other sports, the franchise may lose the customer. Kids fitness franchises that enable children to try different activities in one place tend to keep families enrolled longer.

Fusion Fitness
Several franchises offer members a combination of activities such as spinning, yoga, and barre or boxing and strength training. They, like kids franchises that offer a variety of activities, tend to retain members longer by holding their interest.

Studio vs. Traditional Gym
Most of the options above fall into the “studio” vs. traditional gym category. If you are curious to know more about the key differences between the two categories read on.

Start-up fees. The initial investment for a children’s yoga franchise can be as low as $7,000 while that of a traditional gym may be several million. These figures include franchise fees and several months of operating expenses as well as training, marketing, equipment, and construction/build-out costs.
Size. Fitness studios typically range in size from 1,500 to 7,500 square feet. Some traditional gym franchises can have an average size of 30,000-square-feet. Each square foot impacts rent or property taxes.
Equipment. Studios have few equipment needs unlike traditional gyms that feature a lot of equipment.

Membership. Many small studio fitness franchise concepts are high-end. Therefore, the fees their members pay are typically higher than those of a traditional gym. This is particularly true with the traditional gyms that charge low monthly dues and bank on members not showing up, but continuing to pay their dues.

Staffing. Traditional gyms don’t necessarily require more staff. In fact, some 24/7 gyms are designed to run with very limited staff. When it comes to studio staffing requirements, experienced instructors will be required for classes, however, if you are one of the instructors it’s likely the others will be employed part time, at least initially. This will help keep start-up costs down.

Choosing Your Fitness Franchise Model
Identifying the type of fitness franchise opportunity that appeals to you most is an important first step in finding the best one for you. Once you have selected the basic model, you can investigate the franchises that offer opportunities within that specific model and narrow your choices down to those that are most likely to meet your personal and financial objectives. As outlined above, the cost of any franchise you are considering will be impacted by multiple factors including how large of a space is required, how much real estate costs or rents are in your area, the amenities being offered, how much equipment is needed, staffing requirements, royalties, marketing fees, and start-up costs.

Whichever fitness franchise you select, you will have the support of your franchisor and fellow franchisees whose shared goal is for you to be successful. The fitness sector has certainly enabled many to achieve their entrepreneurial dreams.

5 Unusual Franchise Concepts

Think Outside the Franchise Box
When you think about franchises, do cookie cutter restaurant chains and retail stores come to mind? Think again. You may not have been thinking of a niche or more unique business concept when you first started pursuing a franchise, but maybe you should. Whether it is a high-end pet resort concept or a way to introduce kids to basic soccer skills, there are more and more unusual franchise ideas available today.

According to the International Franchise Association’s annual Franchise Business Economic Outlook for 2017, franchises are expected to grow by $36 billion in 2017 through business and job additions. If you have been dreaming of being in business for yourself, but not by yourself, now may be the perfect time to investigate one of the more unique, niche franchise concepts available to entrepreneurs. Here are some possibilities for you to explore:

Midtown Chimney Sweeps
Created by a second-generation chimney and fireplace technician, Midtown Chimney Sweeps provides the components needed to create a successful chimney cleaning and hearth maintenance business. According to a 2009 survey conducted by the U.S. Department of Housing and Urban Development, 35 percent of American homes have a usable fireplace. Not only is there a market for these services, but also many of the existing chimney cleaners working today are over 50, meaning retirement is on the horizon. Midtown Chimney Sweeps uses the latest technology, from their Triple Filtration Soot Buster to their high-tech business software, so franchise owners have the tools to compete in a nationwide market.

Garage Experts
According to a survey conducted by Racor Home Storage Products in 2013, about 67 million homes have a single-car garage, while 63 percent have a two-car garage. For many Americans, the garage is not only a place to store lawn equipment or their cars, it has become an extension of their home’s living space. In fact, the demand for home garage organization is expected to increase by 5.6 percent per year. Garage Experts franchises are prepared to meet this need with their installation of garage floor coatings, garage storage cabinets, garage ceiling racks and garage slat-wall. Ranked as one of Entrepreneur magazine’s top 500 Franchises for 2016, Garage Experts offers a turnkey franchise opportunity to capitalize on this demand.

Mosquito Joe
The pest control business is a booming one, currently valued at $11.4 billion a year. Mosquito Joe helps entrepreneurs capitalize on this opportunity by offering extensive training and support, as well as a significant long-range earning potential. What’s more the Mosquito Joe pest elimination service is a feel-good business—you are helping people enjoy the outdoors without the hassle of bug bites. With the recent headlines about Zika, the worry over mosquito-borne illness is high, meaning more and more homeowners are projected to seek out pest control for their yards so they can feel safe having fun outdoors. Mosquito Joe is veteran friendly, as well, offering a discount to hometown heroes who invest in a franchise opportunity.

Wild Birds Unlimited
Think that watching birds is for the birds? Well 52.8 million people say they watch and feed birds in their own backyard, adding up to a $6.9 billion a year business. For those with an interest in the outdoors or wildlife, a Wild Birds Unlimited franchise can be a lucrative investment in their future. Featuring products designed by experts to meet the needs of birds, as well as to be enjoyable for the people who use them, the core mission of Wild Birds Unlimited is to bring people and nature together. The Wild Birds Unlimited business model has been proven over 30 years and rated No. 1 in retail for franchisee satisfaction.

BodyBrite USA
Simple to buy, simple to own, simple to make money—BodyBrite keeps the focus on their mission statement and slogan, “Let Your Beauty Shine.” New technologies and a growing demand have fueled the franchise’s growth in the past 10 years, as more and more people seek ways to rid themselves of unwanted body hair and wrinkles. BodyBrite has taken the concept of Laser Intense Pulsed Light (IPL) hair removal, anti-aging and skin rejuvenation and streamlined it to make it affordable for the average consumer. Requiring no beauty industry knowledge and ideal for spaces around 1,000 square feet, a BodyBrite franchise offers a path to owning your own business that is easy to execute and manage.

Five things not to do when buying a franchise

Buying a franchise is a huge decision to make. Even though you’re investing in an established brand name and have the support of the franchisor, you still need to be prepared to work hard and be driven to achieve success.

As with starting any business, you need to do your homework. You should only enter into a franchise agreement after performing thorough due diligence. It’s more challenging to get out of a franchise contract than it is to get into one, so you need to be sure that you’ve found the right business partner before you commit.

To make sure that your route to becoming the boss is as smooth and straightforward as possible, here are five things which you should never do when buying a franchise:

1. Don’t be rushed into anything
Excitement, nerves, enthusiasm: when you’re about to start your own business, you’re likely to be on a rollercoaster of emotions. But don’t let your feelings cloud your judgement or lead you to rush into a decision before you’re ready to do so.

Due diligence is not just a list of tasks you have to tick off before signing a franchise contract. It’s a process that takes as long as it takes until you’re completely comfortable that you’re making a fully-informed decision.

Don’t set a time limit on your research and don’t feel pressured into agreeing to anything sooner than you’re ready. If a franchisor is insisting that you make a payment or sign the agreement before you’ve completed your due diligence, this should act as a red flag. It’s in the franchisors’ interests that you only become a franchisee if you’re absolutely certain that it’s the right move for you. If you’re feeling pressured, then proceed with caution.

2. Don’t take the franchisor’s word for it.
When a franchisor presents you with financials, you shouldn’t be afraid to ask them to clarify how they have arrived at these figures. Also, you should remember, that any projections provided should only serve as a basis for you to develop your business plan and forecasts on. Use them as a starting point as part of your research to validate the franchisors’ claims.

As well as the numbers that the franchisor gives you, you can obtain copies of filed accounts for the business. These are documents which can be viewed by the public and will provide you with an accurate picture of the financial status of the company. If you’re not familiar with reviewing such financial documentation, then you should consult an accountant that specialises in franchising to help you understand the figures.

Of course, the amount of money you can make isn’t the only factor to consider when buying a franchise, but it does play an essential part in your decision-making process. As well as job satisfaction, flexibility and support, you also want confirmation that you can generate a positive return on your investment. This is why it’s vital to back up the franchisors’ claims with your own findings.

3. Don’t spend more than you can afford
Franchises cost a lot to buy. This is one of the most common myths about franchising. With over 900 franchise brands operating in the UK today, there will be a franchise opportunity that suits almost all budgets.

Needless to say, if you want to invest in a McDonald’s or a Starbucks, you’ll need to have significant finances, but there are also a wealth of affordable franchises available. To understand how much you can invest in a franchise you should start by listing your assets and your liabilities. The difference between the two is known as your net worth. Most franchisors set a minimum requirement when it comes to your net worth, so bear this in mind when reviewing franchise options.

The most important thing is not to invest in a franchise where you may be undercapitalised. Running a new business is challenging enough as it is without the added stress of not having enough money. It’s unlikely that your franchise will be immediately profitable and so you should make sure you have enough capital to operate until your business starts to make a profit.

By choosing one of the many affordable franchises available, you can achieve profitability sooner than if you select a business with a high initial fee and many overheads.

4. Don’t keep quiet
Starting a franchise can be daunting. There will be lots of elements of the franchise contract and the franchise business model that you don’t understand but don’t feel embarrassed to ask for things to be explained. The franchisor has a wealth of experience, so prepare a list of questions for them so you can get an in-depth picture of the franchise.

Also, consult a solicitor that has franchising expertise to help you understand the terms of the franchise agreement. You shouldn’t sign up to buy a franchise without fully comprehending what your responsibilities will be as a franchisee. Work with your solicitor to question any terms that you deem to be unfair as there may be some room for negotiation.

If the franchisor can’t answer all your questions, take time to speak to existing franchisees from within the network. They will give you an honest opinion about what the franchise is like to be a part of and can help you fill in any knowledge gaps.

5. Don’t think you need to know it all.
The franchise model is ideal for aspiring franchisees who don’t have any previous experience of business ownership. This is because you get access to all the training and support you need to be able to own and operate your franchise.

Embrace this and take every opportunity to learn. The franchisor will have spent years developing and improving their business model, making mistakes along the way. Thankfully, you don’t have to make the same mistakes. Accept that the franchisor has all the know-how and expertise needed to run a successful franchise and be willing to learn as much as you can.