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Year 1 Franchise

What to Expect in Year 1 of Franchise Ownership

The first anniversary of franchise ownership is a major milestone for any new franchisee. The lessons resulting from a year of experience, if acknowledged and documented, can serve as a guide for the future. Each business is different, each location is different, so the ebbs and flows of each franchise are unique. While it’s impossible for anyone to know exactly what to expect in the first year of franchise ownership, some things are standard.

The franchise fee affords owners certain rights and benefits, one of which is extensive training. Oftentimes this training will take place on the premises of another franchise location. This experience is one of the most valuable a new franchise owner can possibly have. They gain hands-on experience that will allow them to hit the ground running at the time of their grand opening.  Plus, they have the opportunity to forge a working relationship with a fellow owner who may be able to offer insight and support down the line.

It should go without saying, but regardless of the business type, the first year of franchise ownership will undoubtedly involve expenses. While perusing franchise opportunities, it’s easy for someone to become fixated on the franchise fee and forget the other expenses that accompany franchise ownership.  Before making a major commitment, it’s important to calculate all foreseeable expenses such as insurance, lease payments, marketing contributions, plus a contingency fund to help someone decide which franchise fits their budget.

Depending on the type of business, fluctuations can be expected. Some make the majority of their annual profits during the holidays or over the summer months.  Once a franchise has been open for a calendar year, it’s important to note these highs and lows to better plan for the future in terms of inventory, staffing, and hours of operation. If the business owner is unfamiliar with their local community, year one will serve as an introductory period that identifies events which may have a bearing on sales and staffing requirements as well.

Three occurrences are almost a given, and they are: hiring, firing, and quitting. It is highly unlikely that the entire staff present at the grand opening will still be under employ one year later. Choosing the staff that the business opens with will make a lasting impression on all new customers. Weak employees who are not dependable or trustworthy cannot remain with the company, the risk is too great. While some franchises can offer long term career opportunities, others are viewed by employees as waiting rooms until a better opportunity comes along. It’s important to maintain a pool of applicants to serve as replacements in the event of turnover.

The most important thing any franchise business owner can expect in the first year is uncertainty. By preparing for anything and everything, a business owner will be less susceptible to risks and adversity.

Next Steps

If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.

Top Paint and Sip Franchise Opportunities

“Paint and sip” is one of the fastest growing franchise categories this year. In these workshops, you and your friends can paint, create and party. Brush up on what these top studios have to offer and get involved!

Bottle & Bottega

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Bottle & Bottega is “all about friends, a canvas and a bottle of wine.” Rather than an art class, this studio hosts art parties where people can celebrate, relax, try something new and create a masterpiece. Entrepreneur Magazine’s No. 42 best new franchise of 2015, Bottle & Bottega has a total investment ranging from $62,200 to $125,600 and an initial franchise fee of $20,000. The ongoing royalty fee is 6 percent and the term of franchise agreement is renewable after 10 years. Bottle & Bottega requires a net worth of $250,000 and $75,000 of available liquid cash. The company also provides training at headquarters and online.

Painting with a Twist

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Ranked No. 1 in the paint and sip category on Entrepreneur Magazine’s 2015 Franchise 500, Painting with a Twist offers step-by-step instruction for patrons while they celebrate birthday parties, bridal showers, or just a night out. This BYOB studio has a startup fee of $25,000 and a total investment of at least $94,300. The ongoing royalty fee is 6 percent and the franchise contract is 7 years and renewable. Painting with a Twist requires a $150,000 net worth and $50,000 of liquid cash available. However, the company does permit absentee ownership.

Pinot’s Palette

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Pinot’s Palette offers regular painting classes as well as private, corporate and mobile events. This studio, too, encourages you to open a bottle of wine as you open your paint can. To start a Pinot’s Palette, there is a franchise fee of $25,000. The total investment cost falls between $74,200 and $173,500 with an ongoing royalty fee of 10 percent. The financial requirements for franchisees are a net worth and available liquid cash each valued between $80,000 and $100,000. Absentee ownership is not allowed, but the company does provide training both at headquarters and at the franchisee’s location.

Wine and Design

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True to its name, this studio welcomes corkscrews, cups and canvases. Wine and Design hosts individuals, groups and even a kids summer camp. The total investment for opening a Wine and Design franchise unit ranges from $35,800 to $83,000 and the initial franchise fee is 6 percent. The term of franchise agreement is the shorter than the previous studios: 5 years and renewable. Franchisees are required a net worth of $25,000 as well as $25,000 in liquid assets. Only 2 employees are needed to run each unit and absentee ownership is allowed.

Next Steps

If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.

By Erin Cizek

Top 5 Fitness Franchises

Fast food businesses may dominate the franchise industry, but that doesn’t mean fitness franchises aren’t growing stronger each day. In fact, Entrepreneur ranked 21 fitness companies on the Franchise 500 for 2015. Take a look at the top five fitness franchises holding their own:

 

Anytime Fitness
Although only operating since 2002, Anytime Fitness has grown to become the No. 2 franchise on Entrepreneur Magazine’s Franchise 500. This “neighborhood-style” fitness club is always open and affordable. The franchise fee ranges from $22,00 to $32,500 and the total investment from $78,700 to $371,175. A net worth of $250,000 and at least $70,000 in liquid assets are required. The term of franchise agreement is five years with an ongoing royalty fee of $549 per month. All current franchises are owner/operators and 40 percent own more than one unit.

 

Planet Fitness

Planet Fitness brands itself as a “Judgment Free Zone” with no “gymtimidation” as it was started to serve occasional and/or inexperienced gym users. Today there are locations nationwide and the company is looking to expand further. With an initial fee of $10,000, the total investment falls between $824,200 and $3,725,000. The term of franchise agreement is renewable after 10 years and requires an ongoing royalty fee of five percent. The financial requirements are a net worth of $1,500,000 and $500,000 in liquid cash. Absentee ownership is not allowed, and 70 percent of current franchisees are owner/operators.

 

Gold’s Gym

Gold’s Gym first opened in 1965 and has been franchising since 1980, but it shows no signs of slowing down. Ranked in the top 200 of Entrepreneur Magazine’s Franchise 500 this year, Gold’s Gym is seeking to expand worldwide. The total investment is at least $1,033,000 and the franchise fee is $40,000. This gym requires a net worth of $1,000,000 and $400,000 of liquid assets, but it allows absentee ownership. The term of franchise agreement lasts ten years with an ongoing royalty fee of five percent.

 

Retro Fitness

While Retro Fitness’ facilities are ‘80s-themed, the business’ success is not out-of-style. Besides fitness equipment and group training, Retro Fitness also features a smoothie bar, tanning and chiropractic services. The total investment for opening a Retro Fitness ranges from $1,006,600 to $2,065,500, including an initial franchise fee of $69,000. Potential franchisees must have a net worth of $1,500,000 and $300,000 in available liquid cash. The term of franchise agreement is 10 years with an ongoing royalty fee of five percent. One quarter of all franchisees own more than one unit and absentee ownership is allowed.

 

Orangetheory Fitness

Orangetheory is a fitness studio providing high-energy group workouts that began franchising in 2010. Ranked No. 19 on Entrepreneur’s list of Top New Franchises in 2015, the company is looking to start new units both within the United States and internationally. Orangetheory requires an initial fee of $39,500 and the total investment for opening a unit lies between $327,600 and $634,100. Other financial requirements include a net worth of $500,000 and $150,000 in available liquid cash. Absentee ownership of an Orangetheory studio is not allowed.

 

Next Steps

If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.

By Erin Cizek