{"id":42034,"date":"2022-11-01T20:07:37","date_gmt":"2022-11-02T00:07:37","guid":{"rendered":"https:\/\/www.thefranchiseking.com\/?p=42034"},"modified":"2025-01-02T09:56:36","modified_gmt":"2025-01-02T14:56:36","slug":"aspiring-franchise-owners","status":"publish","type":"post","link":"https:\/\/www.thefranchiseking.com\/aspiring-franchise-owners","title":{"rendered":"Why Aspiring Franchise Owners Are Going To Need More Money In 2025"},"content":{"rendered":"\n
\"aspiring<\/figure>\n\n\n\n

Moving forward, all aspiring franchise owners<\/strong> need to rethink their current money situation. <\/p>\n\n\n\n

That said, it’s not necessarily a bad thing. Call it the prudent<\/em> thing to do.<\/p>\n\n\n\n

\"definition<\/figure>\n\n\n\n

(Courtesy of Dictionary.com<\/a><\/em>)<\/p>\n\n\n\n

Keep reading to find out why. <\/p>\n\n\n

 <\/p>\n\n\n

Inflation Is Only Part Of The Reason<\/h2>\n\n\n\n

While it’s true that inflation affects everything from small business loans<\/a>, to the cost of fixtures franchisees need to purchase for their stores, it’s not the only reason you’ll need bigger pockets in order to buy and operate a franchise now-and in 2025<\/em>.<\/p>\n\n\n\n

The real reason has to do with lowering<\/a> risk.<\/p>\n\n\n\n

Yours<\/em>. <\/p>\n\n\n

 <\/p>\n\n\n

How Aspiring Franchise Owners Can Lower Their Risk<\/h2>\n\n\n\n

If you want to lower your financial risk<\/a> when purchasing a franchise, you need to start with more money<\/strong>. <\/p>\n\n\n\n

Shawn Hessinger, from Small Business Trends<\/a>, just interviewed me on “Finding A Perfect Franchise<\/em>.” And part of what we talked about? Money<\/strong>. <\/p>\n\n\n\n

Here’s part of what I told him:<\/p>\n\n\n\n

I like to see a $450K-$500K net worth, with the ability to write a check for about $75K of your own money before you get an SBA loan<\/strong>, or whatever loan you want to get. So budget, make sure you\u2019re going to follow the rules. Realize that there is risk involved. It\u2019s not risk-free. And finally, be prepared to work harder than you ever worked before. In the beginning, at least.<\/em><\/blockquote>\n\n\n\n

The reason I’m talking about net worth and franchising<\/a> is because of the change I made.<\/p>\n\n\n\n

Chiefly, I changed what I’ve determined your minimum net worth needs to be to buy a franchise. <\/p>\n\n\n\n

And just so you know, I used<\/em> to tell my clients they needed to have a $350k net worth… at minimum. Now I’m telling my clients (and you<\/em>) that you need to have $450k+<\/strong>. Why?<\/p>\n\n\n\n

So you do this right.<\/p>\n\n\n

 <\/p>\n\n\n

Prospective Franchise Owners Need Lots Of Breathing Room<\/h2>\n\n\n\n
\"diamond\"<\/figure>\n\n\n\n

If you become the owner of a franchise<\/a>, you’re going to have a lot of pressure on you. <\/p>\n\n\n\n

Outside pressure from your spouse, partner, as well as “monthly<\/em>” pressure from the bank you got your small business loan from<\/a>. And let’s not forget the pressure you’re going to put on yourself to succeed.<\/p>\n\n\n

“No pressure, no diamonds<\/em>.”
\n– Thomas Carlyle<\/p>\n\n\n

One way to alleviate some of that pressure is to have enough money in the bank.<\/strong><\/p>\n\n\n\n

For example, let’s say your net worth is $500k, and you’ve bought a franchise that has an initial investment of $200k.<\/p>\n\n\n\n

You put $75k of your own money in, and got a loan for the rest. That brings your net worth down to $425k. But how much of that is liquid? <\/p>\n\n\n\n

For instance, if you needed an extra $10k to purchase more inventory-or maybe extra marketing for your new business, could you access it within 24 hours? Easily?<\/p>\n\n\n\n

What if you needed to put an extra $10k into your new franchise business for 3 or 4 months in a row?<\/p>\n\n\n\n

How much would that hurt you, financially?<\/p>\n\n\n\n

Could you do it?<\/p>\n\n\n\n

Will you risk<\/em> it?<\/p>\n\n\n

 <\/p>\n\n\n

Franchising Is Not Without Risk<\/h2>\n\n\n\n

Whenever you’re investing money in something, there’s risk. Plus, it’s hard to know what and who<\/em> to believe. Especially nowadays. <\/p>\n\n\n\n

And when it comes to fluff, misinformation, and disinformation<\/a>, the internet has it all.<\/p>\n\n\n\n

In the case of franchising (unfortunately<\/em>), you can easily find numerous franchising websites<\/a> that declare, “Buying a franchise is less risky that starting your own business<\/em>.” Of course it’s untrue<\/a>. <\/p>\n\n\n\n

Not only that, it’s relatively easy to find franchise “opportunities<\/em>” that only cost $5,000-$10,000. Really?<\/p>\n\n\n\n

Moreover, several franchise websites exist that offer “Franchise Reviews<\/em>,” that look legit<\/a>. <\/p>\n\n\n\n

Note:<\/strong> Reviews of anything, from cars to franchises, aren’t legit unless there’s no money exchanging hands (which is becoming increasingly hard to tell<\/em>).<\/p>\n\n\n

 <\/p>\n\n\n

Here’s The Truth<\/h2>\n\n\n\n

Franchise ownership may be right for you, if:<\/p>\n\n\n