YOU MUST HAVE ENOUGH CAPITAL FOR YOUR NEW FRANCHISE!
This may seem redundant. All of your efforts will go for naught if you fall short on working capital. There's absolutely no way a business can sustain itself when the demands for operating capital exceed the supply. I would recommend a contingency fund be established with half again as much working capital as the budgeted amount. Murphy's Law is as good as a reason as any to consider it seriously.
Here are some real situations that caused a great deal of distress for a few franchisees:
- Construction delays, legal problems, and the weather all held up the opening of a franchised retail operation for six months beyond the scheduled completion date.
- A speciality food operation was delayed six months because the specifications for a serving counter were wrong.
- A contractor failed to complete an application for curb cuts, and the Department of Transportation held up a franchisee's opening for six months.
- A Midwestern franchisee relocated to Florida to open a fast food restaurant. Unfortunately, he had to wait four months before the unit was ready for occupancy.
Who suffers financially? The franchisee. He's without a source of income and all he can do is wait- and wait- while the meter continues to run. It's not a very happy thought.
This may seem redundant. All of your efforts will go for naught if you fall short on working capital. There's absolutely no way a business can sustain itself when the demands for operating capital exceed the supply. I would recommend a contingency fund be established with half again as much working capital as the budgeted amount. Murphy's Law is as good as a reason as any to consider it seriously.
Here are some real situations that caused a great deal of distress for a few franchisees:
- Construction delays, legal problems, and the weather all held up the opening of a franchised retail operation for six months beyond the scheduled completion date.
- A speciality food operation was delayed six months because the specifications for a serving counter were wrong.
- A contractor failed to complete an application for curb cuts, and the Department of Transportation held up a franchisee's opening for six months.
- A Midwestern franchisee relocated to Florida to open a fast food restaurant. Unfortunately, he had to wait four months before the unit was ready for occupancy.
Who suffers financially? The franchisee. He's without a source of income and all he can do is wait- and wait- while the meter continues to run. It's not a very happy thought.
Labels: Franchise Opportunity
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