If you’ve been thinking about buying a franchise, this looks to be a great time to do so.
What follows are 5 reasons why this is a great time for you to buy a franchise.
Enjoy my* free report, and best of luck on your journey to becoming your own boss. The rewards can be awesome!
*By the way, I’m The Franchise King®, Joel Libava.
If you’d like to learn about me-and how I can teach you how to find, choose, research and buy a profitable franchise-go here.
12 Months Of Good News
12 months of mostly positive economic data is only one of the reasons why this is shaping up to be a great time to buy a franchise. But there are more.
As a matter of fact, I have 5 very specific reasons why you should look into buying a franchise now. But first, you need to know more about the current state of U.S. economy.
The U.S. Economy
Inflation fears aside, the U.S. economy is expected to keep growing at a pretty good clip.
According to Cleveland Federal Reserve president, Loretta Mester…
“The economic expansion is now in its ninth year, and I expect 2018 will be another good year for the economy, with growth around 2-1/2 percent, which is stronger than my 2 percent estimate of trend growth. I anticipate that the tax package will add about 1/4 to 1/2 percentage point to annual growth over the next couple of years, but based on the positive reactions so far, there’s an upside risk that the effect could be larger. Labor markets have been strong, and I expect that strength to continue, with above-trend employment growth continuing and the unemployment rate falling below 4 percent. Inflation has been running under 2 percent, but I expect it to gradually move up to our goal of 2 percent over the next one to two years.”
That’s pretty darn good news. Especially this part: “Above-trend employment growth continuing and the unemployment rate falling below 4 percent.”
And both of these items have a lot to do with the title of this free report.
5 Reasons Why This Is A Great Time To Buy A Franchise
1. A Good Job Market
As I pointed out in “The Top Franchise Trends And Predictions For 2018,” hiring is on the rise. That’s great news. It also means that unemployment is low…which is more good news.
Unless you’re the CEO of Dunkin’ Donuts. Or, Budget Blinds. Or any one of the 3,500 different franchisors who are trying to sell new franchise units.
That’s because when people are gainfully employed, and they’re making good money, they’re less inclined to make a move. In this case, the move I’m referring to is franchise business ownership.
Think about it: how willing would you be to walk away from a $100,000-$150,000 a year salary in order to try your hand at owning a business?
If you answered “I actually would be willing to look at doing that,” you may be in the minority. But, check this out.
The economic conditions I just described (especially the ones related to employment) means that there are a lot less people looking at franchises. Barring a sudden rush of would-be franchise owners, franchise development representatives (franchise salespeople) are going to have a lot more time to spend with you. Heck, you may end up being treated like you’re a VIP. (Which you are, in my book.)
The bottom line: Take advantage of this time. Really dig into the franchise opportunities you’re interested in. Leverage the knowledge franchise salespeople have concerning their brand. They want to make a sale, and my bet is they’ll be bending over backwards to please you.
Suggested reading: Read the article I wrote for the SBA: Working With Franchise Salespeople.
2. Pretty Darn Low Interest Rates
Today’s small business loan interest rates are pretty low.
If you go with an SBA loan, and you plan on repaying it in less than 7 years, here are today’s interest rates:
$25,000 or less -Prime* + 4.25%
25,001 – $50,000 -Prime* + 3.25%
$50,001+ -Prime* + 2.25%
Prime rates are set be the Fed. Currently they’re sitting at 4.50%
That means as of now, you can borrow money for a franchise at around 8%. That’s very reasonable for a business startup.
It’s important to realize that taking out a traditional loan is not the only way you can borrow money for a franchise business. There are others.
Franchise Loan Alternatives
One alternative is to use a portion of your retirement money to purchase a franchise.
In this case, a company that specializes in this way of funding businesses sets up everything, including a corporation for your new franchise business.
One serious advantage of using a portion of your retirement account to purchase or start a franchise: you don’t owe anyone money. You get to start your franchise business with zero debt.
FYI: I can pretty much guarantee that if you run this idea (of using a portion of your retirement money to start a franchise) by your accountant, he or she won’t like it one little bit.
That’s because accountants are inherently risk-adverse.
Tip: If you’re interested in going this route to get funding for your franchise business, arrange a call between your accountant and a representative from the company doing this very specific type of work. That way, your accountant gets a full understanding of the process.
One more thing.
Several of my clients have used this form of funding to start their franchises. None of them regretted getting funded by using* their own retirement money.
*Never use all of your IRA or 410 (k) money to start a business. Only use a portion of it.
Getting A Loan From Family
Over the years, clients of mine have approached family members for startup money. And some of them even succeeded in getting it!
But, there’s a right way to do it and a wrong way.
Are you prepared to ask a family member for money to start a franchise?
3. The Sizable Number Of Franchise Choices Available
There are 3,500 different franchise opportunities available in the U.S. That’s more than any time in U.S. history.
As a result, even if you’re one of the pickiest people west of the Mississippi, you should be able to find a franchise that suits you. However…
You need to make sure you are the right type of person for a franchise-type business.
In other words, will you follow the system set up by the franchisor?
Will you follow the rules? The operating manual?
If not, if you’re thinking of buying a franchise as a way to let your creative juices shine, don’t do it. You’ll lose your money.
A Few Franchise Examples
These days, there are franchise opportunities being offered that provide just about any service or product needed. And new concepts are being introduced all the time.
If you’d like to learn about some of the newest franchises being offered, and you want to see what some of the current trends are, set aside some time to read my article on the top franchise trends and top franchise predictions that I linked to towards the beginning of this free report.
Secondly, go to Franchise Direct to see all types of franchises, including some of the most popular opportunities available in the U.S.
4. Consumers Have More Money
According to the editors at Seeking Alpha, the most recent trend for median household income in the U.S. is one that continues to rise steadily as it has throughout 2017, after having been flat in the latter half of 2016.
With wages on the increase, (albeit slowly) today’s consumers do have more money in their pockets. The trick (as a franchise owner) is getting them to give some of it to you.
But, I’m not worried about that part at all.
Franchising, rather the franchise model, has been called one of the most powerful business models ever developed.
In essence, almost anyone with a decent net worth, an above average amount of liquid capital, and who’s willing to follow a business system-can usually be in business within a few months of signing their franchise agreement. That’s because once the agreement is signed, the power of franchising is unleashed.
Now, you may not believe me. You may not believe that franchising-as a business model, is as powerful as I say it is.
(From one skeptic to another, I feel you.)
But it is.
The bottom line: Smart franchisors know how to get consumers to spend in their stores. On their products. On their services. Your job is to find one that matches what you’re good at, and that can help you reach your goals.
Do you think you can find a franchise opportunity that can help you be on the receiving end of the increased consumer spending that’s definitely taking place?
Suggested reading: Finding Money-Making Franchise Opportunities
Suggested listening: This Is How NOT to buy a franchise
(From part of a radio interview of me on The Small Business Advocate Show)
5. The Availability Of Great Information At Your Fingertips
There’s never been a time in our history where almost any type of information is so readily available.
In short, you can thank the World Wide Web for that.
As a result, it’s a lot easier to do research on things like products and services than it used to be.
Heck, it’s even possible to do research on big-ticket items like franchise opportunities.
And research can be done almost anytime and almost anywhere.
For example, if you’re just starting to look at franchise opportunities, there are over 100 websites that list them. But not all franchise opportunity websites are the same. Some are better than others. Some provide more than just listings and ads. They offer informational articles, franchise news updates, and more. Like these top 10 franchise opportunity websites.
In addition to franchise-related websites, there are several in-depth how-to articles. Like this one on how to buy a franchise.
And speaking of research, there’s a free resource you can tap into-and it may even be in your neighborhood. They’re called Small Business Development Centers. (SBDC’s)
“SBDC’s provide assistance to small businesses and aspiring entrepreneurs throughout the United States and its territories. SBDCs help entrepreneurs realize the dream of business ownership and help existing businesses remain competitive in a complex, ever-changing global marketplace. SBDCs are hosted by leading universities and state economic development agencies, and funded in part through a partnership with SBA.” – Find A Local SBDC
More On Franchise Research
All things considered, when it comes to researching a franchise, the information found on the internet-as good as most of it is, will only get you so far.
That’s because you need to talk to humans. Humans that own the franchise you’re interested in.
Tip: If you’d like me to teach you all of my best franchise research techniques, so you can get the answers you need before you write a rather large check to a franchise company, take a look at this.
Bonus Reason Why This Is A Great Time To Buy A Franchise
6. You Can Do This
That’s right. This is a great time to buy a franchise, because if you have enough money, talent, and even some moxie, there’s no reason* why you can’t become a successful owner.
*Actually, there are a few reasons why franchise business success isn’t guaranteed.
First of all, if you’re the wrong type of person to own a franchise business, which in essence is a rigid, rule-based business system, success is going to be out of reach. In other words, if you can’t or won’t follow the rules that every other franchisee in the system does, you’re not going to last very long as a franchisee.
Secondly, if you don’t have the ability to set aside 6-12 months of working capital and household living expenses, you may not make it through the first year in business. You need to have a cash reserve to cover your expenses until you at least break-even.
Thirdly, if you don’t hire an experienced franchise attorney to go over your documents and your franchise contract, you’re going into a business blind. That’s never good.
Finally, if you choose the wrong franchise, because you went too fast, or you worked with a franchise consultant/franchise broker/franchise coach whose free services sounded good at first, but she lead you down the wrong path, you’re going to be in a world of hurt. One that can take years to recover from, financially.
Suggested reading: What You Need To Know About Franchise Consultants
If you play your cards right, which includes learning all you can about franchising, choosing a good one, doing great research, having enough money, and covering all your bases, success can be yours.
And this really is a great time to buy a franchise.
“All you need is the plan, the road map, and the courage to press on to your destination.”
– Earl Nightingale
Thank you reading this free report.
The Franchise King®
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