A Coffee Franchise by the Numbers

A Coffee Franchise by the NumbersFranchises often make expensive partnershipsthough many people find them far less expensivethan building a brand new business venture. Thereare still plenty of expenses that go into buildinga franchise that are often overlooked until toolate. Before you even consider buying into acoffee franchise you need to sit back and takestock of your overall financial situation.Business is risky, even going the lower risk routeof purchasing a franchise there is no small degreeof risk involved that you will lose your

investment and perhaps any collateral you hadinvested in your business venture.How much cash do you have available to invest inyour coffee franchise? Most franchises willrequire a personal commitment of finances even ifyou can arrange for a good portion of the coststhrough financing. The reason for this is thatmost people are going to work twice as hard whentheir own money is on the line to make the businessa success. It is a sound business move on theirbehalf and one of the reasons that they are ableto become franchises and maintain a solidreputation for quality goods and services.What is your net worth? There are quite a fewbigger named franchises that require you to havea certain amount of net worth before they willeven discuss an investment opportunity with you.There are various reasons for this and eachcompany has its own reasons. The bottom line isthat you should expect to be asked for your total

net worth and prepared to divulge thatinformation when applying for franchisepartnerships.What are you willing to use as collateral in orderto secure any business loans you may need? Thisis an important question to ask yourself. It isbest; if at all possible, not to risk yourpersonal home or your family's security (IRAs and401Ks) to secure the funds needed to buy into afranchise business. That isn't always possiblehowever and extreme caution is urged when doingso. It is best to go into this with your eyesopened to the risk rather than wearing rosecolored glasses. You run the risk of losingwhatever you use to secure the funds for yourbusiness. Are you willing to accept that risk? Isyour family?What money are you going to live on while buildingyour business? It takes a little time to build asteady profit that will provide a sustainable