How much is it going to cost me? That’s what everyone wants to know whenever they’re about to make a purchase, whether they’re eyeing a pack of chewing gum or the startup costs of a new franchise.
But as you probably know, franchises are expensive—and unfortunately a far more costly endeavor than buying chewing gum. For most people, a house is the biggest purchase you’ll make, but if you become a franchise owner, a franchise is usually the largest. But not always, and Keyrenter, fortunately, is somewhat on the lower end of what a franchise typically costs.
How Much Franchises Typically Cost
It varies, and sometimes the numbers are eye-popping. For instance, if you were to buy a franchise with the famous golden arches, you’d need to have a minimum of half a million dollars in your bank, or as they put it on their website, “non-borrowed personal resources,” before even being considered as a potential franchise owner.
As Franchising.com’s website states of the average franchise, “while costs range from less than $10,000 to upwards of $5 million, the majority of franchises run from about $50,000 or $75,000 to about $200,000 to get started.”
To open the door to owning a Keyrenter, the estimated range of startup costs are $55,140 to $122,395, depending on the size of the market you’re interested in. Incidentally, you can find a breakdown of the Keyrenter startup costs here.
How to Fund a Franchise
So, if you’re thinking of becoming a Keyrenter franchisee —and we’re delighted if you are—you may be wondering what you should do to make sure your finances are in order. We would suggest a few things:
- You need to have some money in the bank. Buying a franchise, as noted, is a big deal. It generally isn’t something that, say, a recent college graduate does. You’ll need to have a minimum of $100,000 in liquid capital —before you take out any loans —and your net worth should be at least $150,000.
- Your credit score and credit history should be impressive. That’s probably obvious. Most franchisees borrow money to help with purchasing a franchise, and so this isn’t an undertaking for somebody with a low credit score and a lot of outstanding debts.
- You’ll need to find help with franchising. Some companies specialize in franchise funding. BoeFly and Franchise America Finance are a couple of examples, but there are more. Your local bank or credit union is obviously a good place to turn to, and while you’ll need to have a strong credit score and credit history, it may help you that you’re buying a franchise rather than asking for a loan to start your own, untested, business. Commercial banks frequently loan out to franchises. You also should consider applying for an SBA loan. The type of SBA loan that most franchises get is known as the 7(a), which will be issued by your bank or another qualified lender.
- You’ll want to have a serious talk with yourself, before you get in too far. Buying a franchise isn’t something you do on a whim —as you’ll discover if you ever try to buy a franchise on a whim. You’re going to be running a business. Even though people buy franchises because they’re far easier to run than a business you start yourself —and because the brand name recognition can help attract customers far easier than when you’re flying solo and nobody’s heard of you —it is still possible to buy a franchise and have it not work out.
Make Sure This is a Good Investment for You
Be honest with yourself and discuss your concerns with trusted family and friends as you go through the process. Another good resource is other Keyrenter franchisees. You’ll want to do your research and request a free franchise report from Keyrenter. Ask every question you can think of when you start talking to Keyrenter about the investment details. You’ll want to make sure —whatever franchise you end up purchasing —that you’re getting a lot for your investment. You want to make sure your new franchise startup costs include training, office equipment and supplies you’ll need, signage, software, licenses and permits and much more. In other words, you’re buying a franchise, and figuring out the startup costs for a new franchise is a big deal. But once you know that this is a good fit for you, then you can allow yourself to start daydreaming and ask yourself the fun questions, like —how much am I going to make? And will I buy a cottage on the lake? Or maybe a boat? Or maybe both?