Be a Millionaire Franchisee

Many franchises are designed to provide a very nice income to the franchisee, commensurate with the level of capital and time commitment the franchisee invests in the business. Nothing wrong with that -- a trillion-dollar industry has been built mostly on that premise!

The challenge is, if you want to build something really big, you'll probably need a business that both supports you and provides additional capital to grow. Those types of businesses exist, but they aren't common, and you need to conduct a careful analysis to make sure any business you contemplate has the ability to get you where you need to go within the timeframe you're willing to allow.

Start by figuring out how much capital you have to work with, how much you need to support your lifestyle while you're building your business and how long of a timeframe you're willing to allow for the business to be built. Now you have the parameters to determine whether a concept can meet your goals.

For example, let's assume you're evaluating an executive model business. Each unit costs $100,000 to open, has average revenue of $300,000 and makes $50,000 per year in profit. Your research shows that aggressive franchisees can open one new unit every six months, assuming they have the necessary capital. Your goal is to build a business that generates $1 million per year in profits, which will require opening 20 total units. Is this business the right one for you to meet your goals? The answer depends on your resources, needs and goals.

If you have a total of $500,000 in capital to invest, need to take no more than $50,000 per year out of the business for lifestyle support during the first three years and want to build a business to the point of making $1 million a year within 10 years ... you're all set with this business! If, on the other hand, you only have $200,000 to invest and need to take out $100,000 per year to support your lifestyle, you're never going to grow this business beyond two units.

There are lots of great franchise businesses that can be used as a platform for building a very large and successful multimillion-dollar business. If this is your goal, the secret to finding the right one for you is to take the time to understand what you have to work with in terms of your resources, what you want to accomplish in terms of your goals and what you need the business to contribute to meet your goals. Then you can determine whether a specific franchise is the vehicle you can use to reach the destination you seek. Good luck on the journey!