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5 Costs to Take into Account When Opening a Franchise

A smart investor looks at all the pros and cons of each investment, carefully weighing options before handing anyone their hard earned money. Investing in a franchise is no different, especially because it is a large-scale investment with potential for a great return.

As you prepare to make an investment in an exciting opportunity, take a look at 5 costs to take into account when you are opening a franchise.

#1 Location

Type of Expense: Ongoing

We all know the saying: the three most important things in real estate are location, location, and location. This is never truer than when you are opening a franchise. The location you choose can literally make or break your business, so choosing the right location is essential.

The reason that your location is an ongoing expense is because you will be paying rent or a mortgage on the space, and prime real estate can be pricey. For most franchise concepts, like the Apricot Lane Boutique franchise, a desirable location is worth every penny, as the right traffic—both on foot and by car—brings impressions by as many as thousands of people every day.

Most franchisors have teams in place to help you choose the optimal location for your franchise, because this is the most important decision you will make when you invest. Thorough market research, investigation of the neighborhood, and lease negotiation are essential to making the most of this expense.

#2 Store Build Out

Type of Expense: One Time

Once you have chosen the right location, you will need to take the time and spend the money to turn it into the beautiful store of your dreams. Because you are investing in a franchise, there will be certain guidelines you must adhere to as far as the appearance of the store.

The franchisor determines things like signage, paint color, fixtures, and even square footage, as they are building a large and cohesive brand that feels familiar in any location. Building out your store can take time, but once it is done you will have a beautiful store.

#3 Merchandise

Type of Expense: Ongoing

This may seem like a no-brainer, but you would be surprised how many franchisees forget to think about the expense of merchandise. Opening a franchise in clothing and apparel means that merchandise will be a consistent cost for which you need to take account.

Owning a franchise that relies on merchandise for your income requires an upfront investment to get your store going. This investment is the foundation on which you will build your franchise’s income, and then as time goes on, you can balance the cost of buying your new merchandise with the money you are bringing in from sales.

#4 Grand Opening

Type of Expense: One Time

After you have put in all the work researching your franchise, finding a perfect location, and building the perfect store, it is time to have a grand opening! This is an exciting moment for any franchisee, whether they work in a hands-on or hands-off capacity. All the hard work of the last few months comes together when your employees are trained and customers are happily shopping!

As you prepare for your grand opening, you will need to invest in quality marketing to attract people to your store. Create a buzz around your store with local ads on TV, radio, social media, print, and any other relevant medium. You can make your grand opening more exciting for employees and customers with things like catered food, live music, and attention-getting things like balloons and banners.

The costs you incur advertising and drawing attention to your grand opening are well worth it when you have a store full of customers and a happily ringing cash register!

#5 Initial Franchise Fee When Opening a Franchise

Type of Expense: One Time

The one-time initial franchise fee is an important part of your investment in a franchise. As far as expenses go, the initial franchise fee gives you a lot of bang for your buck because you get so much from this one-time fee. The franchise fee is what grants you access to a number of franchise resources, including:

  • Brand name
  • Logos and trademarks
  • Operating systems
  • Site selection assistance
  • Market research
  • Preferred vendors for equipment, furnishings, signs, and merchandise
  • Operating manual
  • Training before opening and on location
  • Assistance with grand opening
  • Computer programs

The initial franchise fee is well worth the expense because it saves you the time and struggle of creating a thorough business plan on your own. Even better, the systems, processes, and best practices have all been proven over time, saving you from the headache of going through trial and error on your own.

If you are ready to invest in a franchise opportunity that is a cut above the rest, contact Apricot Lane! We are the clothing franchise with a special focus on on-trend women’s clothing, apparel, and accessories, and we are looking for smart, driven people to be our newest franchise owners.

  • March 17, 2017
  • Blog

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