Starting a franchise can be a great way to open a business with a solid infrastructure and brand recognition already built in. In terms of marketing, the cost savings are enormous when it comes to opening a franchise. However, you still need some health startup capital to start your franchise, especially for fees, licenses, construction costs and other miscellaneous expenses. Yet, if you are careful, there are numerous ways to save money on your franchise’s startup costs. Many franchisees make the mistake of jumping the gun and spending too much money on some of these initial expenses, but these financial missteps will only hurt later on. Here are five ways to save money on your franchise startup.
Negotiate your fees. Not all franchise companies will be willing to negotiate fees, but some will. If you visit Franchise Expo and look through all the franchise companies that are available, you may very well find a company that will be willing to work with you, which can be important if you are on a budget and want to save money. When it comes down to it, some of these fees can be hefty, so it is critical that a franchise company is willing to work with you.
Get a better deal on your lease. When you are looking for a location for your franchise, you want to make sure you get a great deal on the lease. Just because there is a set monthly number, it doesn’t mean that there aren’t ways to lower that number. For instance, you can lengthen your lease term, which means that you will be renting the building for a longer period of time, but paying less on your monthly rent. Another option is to invest in construction to increase the resale value of the building.
Seek financing from your franchise company. Some franchise companies offer franchisees exclusive financing deals. Because of the slump in the economy, many companies are trying to find new ways to secure franchisees. One of the best ways, they have found, is to offer financing programs. If you look at the franchise information of a certain company, you may want to look for these programs, which can significantly reduce your startup capital and funding needs.
Save on the little things. There is a good chance that there is a protocol when it comes to how you can present signage and merchandise your products. However, there isn’t usually protocol on how you can go about creating signage and other important elements of your franchise. For instance, you can purchase signage used from other franchises that have closed down, or you can do your research and get the best quote. Getting creative with the small things can save you a lot of money.
- Cut down on construction costs. One of the best ways to cut down on construction costs is to find a building that doesn’t need that much construction. Having to gut and renovate an entire building will be a lot more expensive than rebuilding a kitchen and repainting the exterior – two things you can do on your own. At the end of the day, having a do-it-yourself ethic will go a long way when you open your first franchise.