“Nothing is more expensive than a missed opportunity.” The franchising industry offers a lot of chances to reach one’s goals in no time. Owning a quick and easy business like a turnkey franchise can be an opportunity you wouldn’t miss and waste.
You may hear the term “turnkey” several times, but what does it mean in franchising? What are the fees involved in purchasing it? Is it profitable to own?
What is a Turnkey Franchise?
Metaphorically speaking, the term “turnkey” in the franchise business comes with a process. A franchisee will turn the key and open the door to start the business operation. Mostly, a franchisor will do 80% of the work so you can kick in as soon as possible.
In this process, the franchisor will provide all the necessary stuff you need to start the business or what is simply called a franchise package. These include:
- handing out business permits and required documents
- looking for a perfect location
- settling the lease (if necessary)
- buying equipment and everything needed for the business
- doing the hiring process
- providing an organized training program
Some franchise companies offer more than what is mentioned above. But, there are a few who offer less than that.
The most important thing you have to check is how profitable is it to own a turnkey franchise? Before that, check out below how much would it cost you.
Turnkey Franchise Costs
It is a price a franchisee has to pay to officially own a turnkey franchise. Once a franchise fee is given by the franchisor, it means that the business is ready to use and operate. Two major fees are covering the turnkey costs.
Direct Costs
From its term itself, a direct cost is the expenses being used for the production of goods or services in a franchise business. Examples for these costs include:
- materials needed
- manufacturing supplies
- labor costs
- salary for the operation staff
Indirect Costs
Also known as administrative expenses, indirect costs are fees that are not directly related to the operation but are needed to keep the business running. Tagged as indirect costs are:
- utility bills
- building leases
- salary for accounting staff and IT team
- business insurance
- employee benefits
Understanding the two divisions on a turnkey franchise fee will help you analyze if such a franchise is profitable to own.
Is Turnkey Franchise Profitable to Own?
Starting a new business or buying a turnkey franchise comes with the same principle: to gain profitable returns. The only difference is that a turnkey franchise is less hassle and more convenient to start with. But, is it really profitable to own?
Below are the top 8 reasons why a turnkey franchise is surely profitable.
1. It is a ready-to-operate business
The good thing about a turnkey franchise is that all that a franchisee needs is provided by the franchisor. You don’t need to start from scratch and spend a lot of money figuring out a good business type. Once you purchase a turnkey franchise, you will have an instant business to operate.
2. The product or service is proven effective
As a known company, there is an assurance that the product or service you’re going to buy as a turnkey franchise is of high quality. Besides, a company will not give out a franchise opportunity if its brand is not yet proven safe and effective. Through a turnkey franchise, you don’t need to do so much effort into advertising your product or service. The brand name itself will do the advertisement.
3. A Quick-to-open business
Since everything that you need is ready to receive, it would be easier for you to start the business as soon as possible. This is an advantage in purchasing a turnkey franchise. The faster you can open the business, the quicker you can gain profitable returns. Rather than putting up a new business when profits are unsure to be, in a franchise business you have a higher chance to receive it in a short time.
4. Gained loyal customers
Another reason why a turnkey franchise is profitable to own is that it has already earned the customers’ trust. Imagine, just the brand name itself is enough to indirectly tell the customers what product or services you’re offering. Keeping these loyal customers will make you near to gaining high profits. Make sure to maintain good relationships within your target market.
5. Company dependence means security
As a franchisee, you are obliged to follow company policies. How is that making profitable returns in a turnkey franchise? As you adhere to company rules, you ensure the quality of the product. Even how long you’ll be in the business, as long as you meet the customers’ expectations, everything will not fall apart. Company dependence will be your safe side to keep on gaining profitable returns.
6. A turnkey franchise can grow easily
Since you can start the business as soon as possible, and you can get profitable returns in a short period, a turnkey franchise can effortlessly grow. On average, it will take not more than 12 months that a franchisee can feel the great income of the business. And because a franchise comes with unlimited opportunities, you will also have a lot of room to be successful.
7. The convenience is equal to higher savings
Starting a business of your own takes a lot of risk factors. Some even end up failing. But a turnkey franchise has lesser risk plus the convenience of owning a business without wasting too much time and money. And since you’ll operate a business that comes with an established brand, the higher chances you’ll have to get profitable returns. It also means you’ll earn more savings.
8. Its success is a living proof
The growing number of franchise companies and their franchise units is a shred of evidence that turnkey franchises are really profitable businesses to own. Not surprisingly the franchising industry is the most profitable form of business opportunity worldwide.
Knowing that a turnkey franchise generates good returns, how will you evaluate such a business opportunity? Please keep scrolling to know more.
Final Thoughts
As your goal is to be a successful business owner, acquiring a turnkey franchise gives you more advantages than any other business opportunity. Why start from scratch if you can have an instant well-established business, right? Through turnkey franchises, you can easily find a business type that fits you and start to operate right away.
You don’t have to think of a business model. It is not necessary to create a business plan and marketing strategies. All you have to do is talk to a franchisor, sign a franchise agreement, and start your franchisee life. With easy steps, you will own a business in a snap.
At first, you might feel doubtful about franchise opportunities. There are also fear factors in buying a franchise. If that is what you feel now, please know that you can seek assistance. A franchise coach can be your best source of motivation and encouragement to start a franchise career.
