“Hey honey, I’m thinking of buying a franchise!”

“Hey honey, I’m thinking of buying a franchise!”

Awkward silence…

“Err.. that’s great babe… ”

But the internal dialogue is quite different…
“That’s ridiculous! How are we going to pay for that?!”
“Will we have enough money to live on?”
“What about the school fees?”
“What do you know about running a business, you can’t even keep the house clean?”

Buying a franchise is a big decision. It needs to be carefully considered before you dive in.

And you need to have a very good look at the numbers.

If you’re buying an existing business, you will have the previous figures to check out. There are specific numbers to check out, so be sure to get some advice on this.

But if you’re buying a greenfield territory, there are no previous figures, so you will need to put some estimates together. And there should be a sound basis behind the assumptions you use.

The franchisor will be able to provide figures they have collected from their franchisees over the years. This can be a useful guide by showing what others have done. But it is no guarantee of your success. That is very much up to you!

A pre-purchase review is a critical component of your due diligence before you buy a franchise. Just like an inspection before you buy a house, you want to know what you’re getting into. The PPR reviews the set up costs of the franchise, the expenses you’re likely to incur in your first year of trading, and what level of sales you need to cover these costs and make a decent living.

Having the family discussion about buying a franchise has more substance to it when you have a pre purchase review to show the financial implications.

Let me know if you’d like to discuss a Pre purchase Review. Fixed price $965 + gst.

Peter