If your dream is to run your own business, you may want to consider investing in educational franchise opportunities, like New Horizons, instead of attempting to build a business from the ground up. Not only does a franchise like New Horizons have an established brand, it’s also much less likely to fail than a startup. In addition, investing in educational franchise opportunities is usually much less costly than starting a company from scratch.
However, if you’re thinking about investing in a franchise, you’ve probably got a few specific questions regarding the cost of doing so. The following are five of the most common questions regarding the cost of educational franchise opportunities like New Horizons.
What Are the Total Costs of Investing in an Educational Franchise Opportunities?
There are a lot of factors to consider, including the amount of space you need for your business and the industry in which you’re investing. In addition to the initial costs, you’ll need to keep in mind the overhead costs, which vary depending on what your business entails. For example, smaller franchises with smaller overhead costs could cost as little as $50,000 to launch, whereas bigger franchises may require you to have at least $500,000 available in liquid capital.
If you are looking to invest in New Horizons, you’ll be required to have a net worth of at least $250,000 and $150,000 in liquid assets to be considered, although the exact costs vary slightly depending on the location out of which you will operate.
How Can You Obtain Franchise Financing?
There are a number of ways that you can obtain financing for your franchise. Banks will often provide small business loans for franchisees. Franchisees often have an easier time qualifying for these loans than companies that are starting from scratch. This is because lenders understand that there’s less risk involved with a franchise.
Another way to get financing is through the franchise itself. Many franchises offer their own financing or have teamed up with a third party that can offer financing.
How Much Funding Will You Be Able to Secure?
The amount of funding you can secure via financing will depend on numerous factors. Lenders will look at factors that include your credit score and credit history, how long you’ve been in the industry of the franchise in which you’re investing, and how strong the franchise’s concept and brand recognition is.
How Can You Get Approved for Franchise Financing?
The approval process works differently from lender to lender. Most lenders will go through the following process:
- Consultation: The lender will begin by identifying how much money you need and the specifics of the franchise in which you want to invest.
- Due Diligence: The lender will perform due diligence regarding any issues that need to be addressed in addition to the quantitative financials behind the franchise. The underwriter may request an interview with current managers of the same franchise.
- Approval Process: The lender will then send all documentation to you to finalize the loan.
- Customization: The last step involves working with your franchisor group to create a customized financing system that will meet your needs.
Do You Need a Franchise Attorney?
It’s not necessary to have a franchise attorney, but it won’t hurt. Having a franchise attorney on retainer can be helpful when it comes to the legal issues of your franchise and can guide you through the buying process.
If you have more questions regarding the cost of our educational franchise opportunities, be sure to contact us at New Horizons today.