People invest in franchises because they’re genuinely excited about the opportunity.

It’s a low-risk, more secure way to open a business and become a successful entrepreneur. For many people, the freedom of being their own boss, setting their schedule, and knowing their hard work affects their profits is enough reason to become a franchisee.

Before you commit to investing in a franchise, however, there are important financial questions to ask yourself before you begin. By doing do, you can help ensure you make the smartest and most well-informed decisions with your money and help set a course for success.

Here are 5 Must-Ask-Yourself Financial Questions Before Buying a Franchise:

1. How much total investment will a franchise require? On top of your franchise fees, there will also be the cost of legal fees, overhead costs, and a lease and/or mortgage if you’re operating a traditional brick-and-mortar franchise. Be sure to do your due diligence ahead of time and investigate these costs.

2. How much capital reserves will I need to cover losses? It takes time to develop a steady customer base. In case you’re not selling as much as you’d like at the beginning, be sure to have a reserve of cash to cover salaries and operating costs for a few months. A few months may seem long, but it’s always better to guess high and better manage your risk.

3. How much money will I need to cover my own living expenses? On top of money to cover your franchise at the beginning, you’ll also need to ensure you have enough money on hand for your own living expenses.

4. How long will it take your franchise to break even? For most businesses at the start, you’ll need to keep funneling money in before you make any. As part of your business plan, project when you’ll break even. Be conservative, and be sure to estimate and plan for the worst possible outcome rather than a best-case scenario.

5. What standard and alternative financing options are there? Bank loans and commercial leases are among the most common forms of financing for franchises. In terms of a loan, it will have to be secured through your personal collateral (such as a home equity) or through an SBA-backed loan. For alternative options, family and friends, online kickstarter campaigns, and retirement funds from IRA and 401Ks are also another common way to access funding for a franchise.

To learn more about entrepreneurship through franchising, attend our free monthly webinar, Franchise Ownership as a More Stable Career Path. The webinar is free, but you need to pre-register, which you can do online by clicking on the linked seminar title.

You may also register by calling 866-246-2884.

Some people learn through textbooks, while others from life.

For U.S. Military veterans, their business education came on the battlefield – a place where success isn’t an option, it’s a matter of life, death, and freedom.

Through selfless, honorable service, vets also developed some of the strongest leadership qualities; skills that they can use when the time comes for them to transition back into civilian life and find a new career.

Confidence, dedication key to overcoming challenges

To succeed in the line of duty, veterans had to have an unflinching sense of confidence in not only their abilities, but the abilities of their comrades as well. In franchising, it’s crucial for franchise owners to be able to have the confidence to lead their business while also trusting in their staff to take care of their duties.

As part of this confidence and trust, veterans thrive as franchise owners because of their dedication. They devoted a large part of their life to serving their country, and didn’t back down in the face of great challenges and hardships. When problems arise in business, they’re able to overcome them with ease, knowing that they can survive minor setbacks and come out on top.

Vets able to draw on military experience to lead processes

Like any franchise, following the tried-and-true processes that make the franchise system successful is the key goal. However, some franchisees might want to stray from the formula and go their own way – oftentimes leading to failure.

Veterans, on the other hand, possess the leadership skills to operate their franchise according to the processes set out by the franchisor. They recognize that leadership in franchising isn’t about instability and egotism, it’s about recognizing that following the rules of what works is where they’ll find the most success.

It’s the same way in the military, where rules and processes were followed in achieving their missions.

And it takes a real leader to recognize this.

To learn more about entrepreneurship through franchising, attend our free monthly webinar, Franchise Ownership as a More Stable Career Path. The webinar is free, but you need to pre-register, which you can do online by clicking on the linked seminar title.

You may also register by calling 866-246-2884.

April Fools was over two weeks ago, but apparently it doesn’t matter for KFC.

This time, the joke is on America’s fried-chicken staple, which is actually selling drumstick corsages just in time for high school proms.

Teaming up with Nanz and Kraft, a Louisville florist company, KFC is offering finger-licking corsage-chicken hybrids, which feature a drumstick — yes, a drumstick — instead of the traditional floral decor, along with silk baby’s breath, green leaves, and a white ribbon.

Orders for the bizarre graduation accessory can be made almost anywhere. Once an order is placed, Nanz and Kraft will ship the corsage and a $5 voucher that will allow the purchaser redeem a fresh drumstick at any KFC location.

There were only 100 originally made, and he cost for one is $20. Additional shipping costs vary, of course, depending on the customer’s distance from Louisville, Kentucky.

“Word is spreading, and they’re going pretty fast,” said Angie Searcy, general manager of Nanz & Kraft, in an interview with USA Today, who added that they may consider making more than 100 if KFC wants to continue the offer.

“We are shipping them all over the place. The bulk of (orders) are from different cities and states, not actually Kentucky,” she added.

In the strange spirit of it all, co-owner of Nanz and Kraft, Eddit Kraft, said to Global News that, “We actually have a couple that’s getting married in Louisville that’s wondering about a wedding, and they want to incorporate their flower centrepieces with the KFC chicken buckets.”

“But we’ll see where it all goes. We might have to do boutonnieres next year or something like that,” he said.

To learn more about entrepreneurship through franchising, attend our free monthly webinar, Franchise Ownership as a More Stable Career Path. The webinar is free, but you need to pre-register, which you can do online by clicking on the linked seminar title.

You may also register by calling 866-246-2884.

Are you attracted to the idea of opening a franchise? It makes sense—you get a recognized brand, a proven operating system and built-in sales and marketing training and support, usually for less than it would cost to launch a similar business from scratch. Franchise Times reported on some intriguing franchising trends for 2013 and heading into the coming year, including healthcare, celebrity endorsements and consolidation.

Healthcare Franchises

The Affordable Care Act has sparked some surprising business franchising opportunities, such as the new economy hearing aid franchise Zounds, and new nutrition and fitness franchise concept Red Light, Green Light, Eat Right. Other hot medical franchise opportunities include chiropractic, lab testing, weight control, mobile dental equipment repair, fitness centers, learning assistance, home care and hospice and senior nursing care. Expect to see even more varied franchise concepts as naturopathy, lasik eye treatment and home health care, due to the expected addition of millions more Americans with health insurance and a shortage of primary care doctors.

Celebrity Endorsements

Celebrity endorsements are gaining traction in franchising. Stars bring in customers and big business. The latest celebrity endorsements for franchises include Peyton Manning for Papa John’s, singer/rapper Pitbull for Miami Subs, Shaquille O’Neal and Auntie Anne’s and Magic Johnson and Starbucks. Celebrity endorsement isn’t a new marketing concept and while it does come with some pitfalls, partnering with someone who already has a huge fan following can be a shortcut to success.

Consolidation

Franchise Times reports that franchises sold in record numbers in 2012, in addition to many mergers and acquisitions in the franchise world. The trend continued in 2013, with franchisees getting bigger because smaller units are selling to big operators due to increasing food costs, anticipated rise in healthcare costs in 2014, costly remodeling campaigns and retiring operators. Costly rebranding and remodeling campaigns are big incentives for smaller operators to sell. Burger King and Wendy’s have major remodeling and rebranding initiatives, and Applebee’s is rebranding.

How to Get Started

The Entrepreneur Authority recommends you first figure out what your priorities and expectations are. Consider such factors as what industry you want to work in, if you want a large brand or a new niche, and how much you are willing and able to invest.

As with any business and financial dealings, conduct your due diligence as far as raising the necessary capital. The Small Business Administration (SBA) has many resources for those who want to buy franchises, including tutorials and franchise research resources. The SBA also has information about securing a business loan to fund your franchise purchase. In addition to business loans, interested entrepreneurs may be able to fund their venture by selling annuities for a lump sum payment up front.

Finally, read and understand the detailed disclosure document required by the Federal Trade Commission’s Franchise and Business Opportunity Rule.

In our Veteran’s Day post earlier this week, we mentioned the fact that the VetFran Operating Enduring Opportunity program that launched in 2011 with a goal of recruiting 80,000 veterans and their spouses to franchising has already far surpassed that goal. 

More than 150,000 veterans, spouses and wounded warriors have started new careers in franchising, including more than 5,000 as franchise owners!

This infographic takes a look at the numbers behind veteran-owned businesses in America:

TEA is proud to support VetFran and to assist veterans in their search for a new business.  If you are a current or former member of the U.S. military looking to pursue a dream of business ownership, give us a call at 866-246-2884.  Our service is free, and we would consider it an honor to assist you with achieving your dreams.

You can also learn more about franchise opportunities at our free monthly webinar, Franchise Ownership as a More Stable Career Path.  The webinar is free, but you need to pre-register, which you can do online by clicking on the linked seminar title.

You may also register by calling 866-246-2884.