Many years ago I was thinking of starting a business. A franchise seemed like a very good alternative. I would be buying into an existing brand name with a proven track record of success. However, as I did my own research the answers that I found were not what I expected.

I attended franchise exhibitions and spoke with a lot of different people regarding what was necessary to start one. I found out for the different franchises how much startup capital was required and also how much cash was needed. I did not have the money upfront to start so I would have had to borrow it. I found different places where I could get a loan and enquired about the necessary steps.

However, in doing my due diligence correctly I decided to personally speak to some franchise owners to get enough feedback to try and decide what franchise I would be best suited for. The responses that I received were very surprising and not what I had expected at all.

Most of the franchise owners were earning a decent living, but very few had much time for themselves. They were working a 14 to 16 hour day. Also some of them had negotiated long term leases, but were hardly making enough money in profit because they had to spend most of the profit paying for rent. One owner told me that the land owner had calculated the projected turnover inaccurately and that the turnover he was experiencing was a lot less than originally projected. So in the future he would only negotiate a lease that took the actual turnover into account as a percentage.

Another owner also told me that when he started his franchise he had bought all the kitchen equipment brand new and paid an absolute fortune for it. He also mentioned that if he started his franchise now he would look for good quality second hand equipment and only pay about a third of the price he had originally paid.

Other unforeseen expenses that franchise owners in shopping centers experienced was refuse removal and security expenses. When deciding on a franchise it is very important that you do your homework correctly and know exactly what you are getting into. Unfortunately most business owners do not do this correctly and end up with a lot unforeseen expenditure that puts a strain on their business.