Barista Magazine

APR-MAY 2018

Serving People Serving Coffee Since 2005

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inventory and equipment prices due to the company's collective buy- ing power, which can make it easier to get fi nancing. Some franchise businesses even offer fi nancing in-house—though not likely for the lowest interest rates, so it's good to shop around. But if you think you might have a tough time getting a small-business loan from a bank, it could be worth it. You will always owe monthly royalty payments, however—any- where from 5–8 percent of your total gross sales—for operations, advertising, and overall brand support. But some franchise businesses charge a higher percentage based on net sales—somewhere between 6 and 10 percent. Do your homework Talk to people who own particular franchise(s) in which you're interested, and find out if they have the mix of autonomy and corporate support you're looking for. Read between the lines of what they're saying. Some owners may expect the head office to solve all of their problems, when they might be needing to take more responsibility for their business. Or maybe they actually did buy a business model that promised support, and that support has not been delivered. Also consider how far the corporate offi ce is from your location, and how much fi eld support they can offer. Some franchisers may not pro- vide a ton of resources for success at your particular location, but that could translate to greater autonomy—a plus for some, not for others. Others may offer a wealth of support that could make them well worth the investment. Ultimately, different franchisors may offer radically different terms and conditions, so it pays to comparison shop. Do your research and seek legal advice. The bottom line Buying a franchise can work well for people who thrive in a team environment and have limited business and industry background. A franchise with a good location and a brand that remains popular should be a pretty solid business. If you want to own a coffee shop but you don't want to risk a lot of time and capital on a venture that could fail, it could be for you. ILLUSTRATION BY TKTK Different franchisors may offer radically different terms and conditions, so it pays to comparison shop. 115

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