Your heart is in the cleanup and restoration industry, but it’s time to think about working for yourself rather than someone else. A logical way to proceed is to consider launching a franchise associated with a recognized brand. To that end, you’ve been looking closely at Paul Davis franchise opportunities in your area. While you do that, compare those opportunities to the ones offered by other companies. Here are some key points to look at closely.
Your Initial Costs
There are a number of initial costs involved with setting up a franchise. The first is the franchise fee proper. This is often a set fee that allows you to make use of the franchisor’s name and branding in relation to your operation.
There will also be startup costs to consider. This figure can vary widely, based on the types of initial support that’s offered. You will also need to consider the costs of building leasing or construction, getting the equipment and supplies needed to open the doors, and even the costs of securing business licenses and insurance. Make sure there are ways to cover these costs at once, since none of them can be delayed until the franchise begins to make money.
The Royalty Structure
You will pay royalties to the franchisor. How those are calculated vary from one entity to the next. With some, there is a base amount that will apply for each period. It may be augmented with a percentage of the actual collected or generated revenue. Others may have a royalty schedule based on a sliding scale, meaning the amount owed is based on how much money you have coming in.
It’s important to ensure that you have a plan for covering the royalties, especially during the early months when you may or may not have much revenue coming in. Doing so allows you to avoid late fees and penalties that would place a further drain on your revenue stream.
Volume Discounts on Supplies and Equipment
It’s not unusual for franchisors to negotiate volume discounts on supplies and equipment that their franchisees need to operate. This is good news, since the unit costs that apply are likely to be much lower than what you would be able to get as a stand-alone entity.
When evaluating Paul Davis franchise opportunities alongside other franchisors, do look into the type of vendor and supplier discounts that you can put to good use. The best franchise deal will be geared toward helping you keep costs lower and increasing the odds of offering competitively priced services in your territory.
Opportunities to Set Up More Franchises in Other Areas
While your plan right now is to launch a single franchise, things may turn out to be better than you hoped. If so, the goal may broaden to include basing more franchises in other cities. It’s good to know what the franchisor you’re leaning toward thinks about that possibility.
What you hope to find is that the franchisor recognizes the potential of aiding a successful franchisee in opening more operations in new areas. If not, it might be in your best interests to look at a different franchisor.
Remember that your goal is to establish a working relationship that will benefit both parties for many years. Choose the franchisor wisely, and the odds of that happening are much higher.