The initial investment in a franchise is a large part of what you will be paying to the franchisor. The initial franchise fee is paid to gain rights to the franchisor’s brand name, trademarks, business system, initial training, etc. The fee varies with each franchisor and is largely based on the location you choose for your computer training franchise and the popularity of the brand.
Along with the initial franchise fee, there are other costs to consider, including that of buying/renting franchise space, cost of equipment and supplies, training expenses, leasehold improvements, deposits and licenses, and legal and accounting fee. In a computer training franchise, the cost of equipment is significant and, therefore, needs to be considered a major expense. Here are the three key factors to contemplate before investing in a computer training franchise.
1. Investment Required for Franchise Fee and Building the Business
A franchisor charges various kinds of fees (initial franchise fee, royalty fee, ad royalty fee, etc.) and expects a certain amount of investment from a franchisee. The initial investment can be as low as $18,000 (minimum initial investment for becoming CompuChild’s franchise)[i] and as high as $119,089 (maximum initial investment for becoming iDropped’s franchise)[ii]. Apart from the initial investment, there may also be net-worth requirement and liquid cash requirement that may mean a further investment of thousands of dollars. iDropped, for example, has a net-worth requirement of $125,000 and a liquid cash requirement of $75,000.[ii] Certain franchisors provide assistance to franchisees in getting financing to cover franchise fee, startup costs, equipment expenses, payroll, etc.
A franchisee is required to pay royalty on the percentage of total sales each month to the franchisor. Usually, royalty is between 4 to 8 percent. It is best to check how the franchisor calculates the royalty, as some franchisors have a different method of calculating it.
The cost of buying/renting and preparing the location for your franchise is another major consideration. After deciding whether to buy or rent space, also calculate the cost of renovating/preparing it for computer training. Any special requirements that a computer franchise needs such as computer tables, enclosures, presentation screens, etc. can be listed when calculating the total investment required.
2. Hiring Key Staff
A computer training franchise requires experienced and competent teachers, a skilled management and reliable support staff. In order to hire capable key staff, you may consider availability of computer teachers and managers in the location you have chosen for your franchise. Researching about computer institutes, universities and schools in the area can help you to get in touch with competent computer teachers.
Online sources such as LinkedIn are precious resources to get in touch with qualified computer professionals and teachers. Checking the availability of computer teachers and managers in your chosen location will ensure that you stay with capable key staff at all times.
3. Various Marketing Required for Launch
A successful launch is not about the money spent; it is about gaining visibility. As more relevant people get to know about your franchise, greater the publicity your computer training franchise will get. To make your franchise launch a great success, you can use these methods to market:
- Social Media Presence – Create a buzz using social media platforms such as Facebook and Twitter.
- Freebies and Entertainment – Use freebies, karaoke and social entertainment to create a friendly, inviting atmosphere.
- Email – Send email invitations to targeted customers.
- Advertisements – If you have the budget, use billboards, television, radio and newspaper advertisement to gain greater visibility.
- Flyers – Distribute flyers at universities, private educational institutes, schools and libraries.
- Website – Publicize the launch of your company website, and link it to your social media presences.
- Press release – Share a press release of your launch at various free and paid online platforms.
Investing in a computer training franchise can be hassle-free if you have the relevant information, conduct careful planning and take timely action. You can take your new computer training franchise to great heights soon after its launch if you keep a close and continuous watch on expenses, human resources and marketing.