Joel Libava
Breaking even in a franchise is one of the most important things you need to find out about.
That’s because you’ll know when your franchise profits will start rolling in. Got it?
When Do You Break-Even In A Franchise?
You’re not going to feel very good about things until…
You get to break-even in your start-up franchise business.
That’s because pouring money into your new business-without much coming in, is no fun.
But, when money does start to flow into your franchise business, your entire outlook on things will change.
And, when your revenue increases-consistently, things will start to feel magical.
Ask The Question
If you ask the right questions of current and former franchisees during your franchise research (and get answers) you’ll be able to make an intelligent fact-based yes or no decision.
Stick with me; I have the 40 best questions to ask franchisees.
“How long did it take you to break even in your franchise?”
The Definition of Break-Even in Franchising
In franchising, break-even refers to the point at which the business generates enough operating revenue to cover monthly operating expenses and start paying back the initial investment.
You need to find out how fast breaking even happens…on average.
One of the reasons I recommend calling 10-15 current franchisees (and 1-2 former franchisees) is to get some averages.
For example, maybe one or two franchisees broke even in only 6 months, 8 of them got to their break-even points in 12 months, and it took 18 months for the franchisee that you spent the day with. (I want you to visit at least one up and running franchise location as part of your research.)
Information Is Power
It’s a lot easier to find information about the top franchises around than it used to be.
But…and this is important, the massive amount of information that’s only a mouse-click away is not necessarily factual.
Consider the source….and what this source is trying to accomplish by putting it out there.
Tackling something as big as what you’re thinking of doing-becoming the owner of a franchise business, needs to be done a little at a time.
How do you eat an elephant?
One bite at a time.
(Courtesy of Jerry Moriarty)
*Images courtesy of wikipedia
keepitsurreal on Flickr
Stuart.Bassil on Flickr
About the Author
The Franchise King®, Joel Libava, is a leading franchise expert, author of "Become a Franchise Owner!" and "The Definitive Guide to Franchise Research." Featured in outlets like The New York Times, CNBC, and Franchise Direct, Joel’s no-nonsense approach as a trusted Franchise Ownership Advisor helps aspiring franchisees make smart, informed decisions in their journey to franchise ownership. He owns and operates this franchise blog.
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