Calculate The Benefits Of Franchise Business | World Business ...

Calculate The Benefits Of Franchise Business

Franchise business becomes one of how to invest the funds. Hopes of obtaining business profits in a short time and easily is often the lure of franchise business. What?s more the promotion and appointment of the franchisor?s often very pompous and gave no explanation for the bitterness. Therefore if you want to invest your money in a business franchise, the correct estimate is well profit losses according to objective analysis. Also need to consider what type of franchise is profitable.

Even though a business franchise has been known to have a reputation of bringing profits elsewhere, you should still be actively working to advance the business of franchising. However the franchise is a business system that can not be separated from the calculation of how much revenue per day, how many benefits, when behind the capital/BEP (Break Event Point) and others.

To calculate profit business franchise you should calculate the costs incurred. There are at least two types of franchise fee that you have to prepare the initial investment and ongoing costs.

The initial investment is a starting capital we should bury it or that is needed to start a business franchise, among others:

• License Fee, is the cost of purchasing the rights to use the brand name franchises and business concepts.
  Place of business. Just like any other business, you must have a place of business. Its shape can be diverse ranging from permanent buildings purchased or leased, booth, to online stores, according to the specifications of the franchisor ?s.
  Inventory and equipment are the costs associated with inventory and purchase of equipment business.
  Working Capital. The early efforts require working capital as a backup to payroll, and overhead (utility). Generally the franchisor?s will ask you to reserve the supply of raw materials and working capital amounting to 3-6 months of operations.

The cost of taking place is the cost which is paid during a routine operation, namely:

• Royalty. Franchise owners also charge ongoing royalties. However, not all the franchise imposes a royalty.
  Operational costs are the costs of routine (monthly/yearly) issued in order that the undertakings can take place properly.
• Both initial investment and ongoing costs are costs that will affect your business advantage. The principle is more small fee counting profits

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