Discovery Point Blog

February 11, 2020

Looking for Affordable Franchises: Find Out How to Evaluate Your Options

Making the decision to purchase a franchise requires extensive research and forethought. Not only do you want to select a franchise company you “click” with on a personal and professional level, but you also want to be sure to choose the opportunity that allows you to earn a solid return on your initial investment.

When it comes to finding and evaluating affordable franchises, there are several steps you can take to rule out options that are too expensive for your budget, so you don’t waste any precious time during the research process. Read on for our suggestions for discovering affordable franchise opportunities.

How to Find Affordable Franchises

Strategically conducting an initial franchise review can save you quite a bit of time and money, as well as future headaches. First, you’ll need to access each company’s Franchise Disclosure Document, known as the FDD. 

At Discovery Point, we have potential franchisees complete an inquiry form as well as take part in a short introductory call with our team in order to ensure they have all the contextual information they need before thoroughly reviewing this document.

Every franchisor’s FDD should offer in-depth information about the initial and ongoing costs involved in establishing a franchise location. In addition to the specific costs outlined in this document, it’s also a good idea to factor in the cost of any accounting or legal help that will be required.

As you review the various costs of opening a franchise, you’ll need to remember that it takes time to get a business up and running, even when you purchase a turnkey package that offers a fast track to opening your location. There could be an extensive site search involved or thorough training required. Even after you begin operations, it will take time to break even on your investment before you begin to make a profit.

In order to gain a big-picture understanding of what your financial future will look like after purchasing a specific franchise, first estimate the operating expenses for the initial year of business as well as two years of personal living expenses. Then, compare these estimates with the experiences of current franchisees in the network you’re considering. This data will give you a more realistic understanding of the affordability of the franchise at which you’re looking. 

Understanding Franchise Fees

Franchise business models are typically considered to have less varied costs than start-ups built from scratch. Nonetheless, they do have their own types of associated costs. It’s important to compare these costs across franchisors to ensure you’re getting the most out of your investment. 

Here are some of the specific costs for which to keep an eye out:

  • Initial franchise fees. These may include the costs of purchasing initial inventory and renting and equipping a space.
  • Continuing royalty payments. Royalties are often calculated as a percentage of gross income. As royalties are based on the right to use the company’s name, they must be paid even if you’re not yet making money and even if you choose to end your franchise agreement earlier than planned.
  • Advertising/Marketing fees. Advertising or marketing fees often go into a fund for national advertising and might not be available for use to promote your location specifically

It’s also worth considering the various benefits and forms of support different franchisors offer. For example, some franchisors may help with finding a location and provide initial training, ongoing support, and staffing advice. Others may simply provide you with the right to use their name and products. While it’s impossible to put a dollar value on business support, it should definitely be factored into your calculations of a franchise’s affordability.

What Makes Discovery Point an Affordable Franchise

At Discovery Point, we’re the only child care franchise that utilizes a flat fee system. Rather than paying fees based on a percentage of your total sales, you can look forward to taking home more of your profits as you experience business success. In addition, our franchisees have the opportunity to own their own building and land. With a Discovery Point franchise, you can take advantage of the long-term equity benefits associated with a real estate investment.

We understand how challenging the first years can be for many new business owners. That’s why we’ve made a point of discounting our service fees for the first 12 months of operation. New franchisees also get to enjoy a discounted rate for our National Advertising Fund during their first year of business. 

With one of the lowest franchise fees in the industry, we offer affordable franchise opportunities for entrepreneurs looking to make a solid investment in a thriving business sector.

Learn more about our affordable franchise options today! Give Discovery Point a call at 770-623-1140 for details.