Save time and money and be certain that you’ve found a resales or franchise that meets goals
You’ve done your research into the pros and cons of setting up shop on your own versus purchasing an established resale clothing franchise such as Uptown Cheapskate. Like the thousands of entrepreneurs who’ve made the decision to become franchise owners before you, you’ve realized the advantages of franchise ownership.
You’ll need to spend time researching franchise opportunities before you finalize your business plan. After all, there are lots of franchises to choose from, and not every opportunity is created equal. Lucky for you, however, there aren’t many resale clothing store opportunities and even fewer that are of the high-caliber offered by Uptown Cheapskate.
The beauty of franchise systems is they’ve taken all the guesswork out of starting a new business for you. They’ve been there and done that and have perfected and streamlined their business model over the years, making modifications and listening to franchisee feedback. Due to the time-tested nature of franchises, now more than ever may be the best time to consider franchising, according to this Forbes Council guest column.
Franchises represent some of the most successful businesses in the world. Now, more than ever, franchises have been put to the test. Their business models have been stress-tested in real-time and those that come out of the pandemic stronger and more creative will be that much more attractive to future franchisees seeking a brand that has withstood one of the worst times in recent history. – Faizan Kamal, Forbes Council Member and Franchise Coach
Now that we’ve established that franchising is a great option for opening your own resale clothing shop, let’s look at seven questions every potential franchisee should ask before investing in a franchise opportunity like Uptown Cheapskate.
1 – What are the qualifications to become a franchisee?
Every franchise opportunity has requirements that a potential owner must meet in order to become a new franchisee. These qualifications can fall under both financial and skills requirements. When examining your franchise opportunities, understanding these qualifications will help you determine which franchise is right for you. Ask your franchise consultant what the requirements are for consideration.
While you are discussing these qualifications, you’ll gain insights into the franchise system and the franchise company will get to know you. They want you to succeed because when you make money, they make money.
Financial requirements vary greatly from franchise to franchise. That’s because startup and operation costs and the time it takes to grow a sustainable revenue stream varies from system to system. Understanding how these startup costs impact your path to business will help you decide if this is a good fit for you..
Pro Tip: While you’re discussing the financial qualifications, make sure to establish whether the financial requirements are liquid capital or line-of-credit based. Some franchises may seem expensive initially, but are quite affordable when a potential franchisee’s credit worthiness is considered.
2 – What are my startup costs?
There’s an old adage, “It takes money to make money.” That’s extremely relevant in a franchise opportunity. Franchises cost money to purchase, and with good reason. When comparing opportunities, it will be necessary for you to understand the kinds of costs associated with a franchise as well as how much investment a particular franchise needs.
While every franchise has different start up costs and some specific to the retail industry, there are some that are common to all franchise systems. A few of these costs include:
- Initial Franchise Fee: This is the amount the franchisor charges new franchise owners for becoming a part of the company. Think of it as the money you pay to become a part of their brand.
- Travel and Living Expenses: These are the costs associated with traveling to training centers, visiting franchise locations, and completing the initial training. Travel expenses may seem small, but they can add up quickly.
- Leasehold Improvements or Construction: When you lease an office or retail location, you’ll have to invest in a “build out,” or making it ready for occupancy. Depending on how many modifications are needed, this could be a big expense.
- Insurance and licenses: Almost all businesses require some kind of insurance, whether it’s blanket liability or just workers’ compensation. Your franchise sales consultant can shed light on the kinds of insurance your specific business will need.
- Operating funds: You’ll need to pay your team, rent, and utilities for your business, as well as keep a roof over your own head once you open your business. Realistically you may not turn a profit for several weeks or months. Therefore many franchise companies recommend two or three months’ worth of expenses in order to launch a successful business.
These expenses are just a few of the kinds of costs you can anticipate when you’re exploring your franchise options. Each franchise opportunity publishes these costs in their Franchise Disclosure Document, and your franchise sales representative can walk you through the required financials.
3 – How long have your franchise owners been in business?
If you’re like most entrepreneurs, you’re not opening a business simply to make a quick buck. You’re looking for a long-term investment and something you can build over the years. You’re more than likely looking for a business that will provide for you and your family once you retire and that you would even consider turning over to your kids.
Talk to your franchisor about the longevity and satisfaction rate of their franchisees. Chances are they’ll even connect you with like-minded entrepreneurs who can share with you what drew them to the franchise opportunity and why they ultimately decided to invest in it themselves.
4 – How long between initial training and opening?
When it comes to planning your franchise investment, one consideration that can have a tremendous impact on your decision is how long it takes to get your business open. Until your business is open, you’re not generating revenue, and that can be a significant factor in whether a franchise opportunity is a good fit for you.
Some franchise concepts can take a new owner from training through grand opening in just a few weeks. Others can take six months or longer. Discuss the timing with your franchise sales consultant before you make any decisions. They’ll be able to provide you with a clear understanding of expectations and timelines before you make any decisions.
5 – How large is the market for resale clothing?
Establishing how big a slice of the market a franchise has seems like a simple question. But bigger isn’t always better when it comes to market size. The size of a franchise opportunity’s market impacts all kinds of factors.
Market size impacts work-life balance and potential growth. If an opportunity taps into a relatively small market, this could limit the amount of potential revenue. If the market is vast and underserved, it could mean a bonanza for your new business. That also comes with a price: you may have to invest more time than you’re wanting to put in.
Throughout all of these considerations, you’re not going this alone. The franchise opportunity’s sales team is there to guide you and provide a clear understanding of what to expect. They aren’t there to simply sell you on their product. They want you to be successful and committed to the brand.
6 – Do I need a special skill set to own a resale clothing franchise?
With thousands of franchise concepts on the market, there is literally a franchise serving every possible segment of the economy. Home repair services, tutoring companies, smoothie shops and carpet cleaning companies are just a small sampling of the myriad franchising opportunities. If there’s a demand for it in the marketplace you can probably find a franchise serving that need
Think about each of those kinds of businesses and then ask if you have to have the skills necessary to deliver the service. Or, are you able to simply manage the business and hire staff to deliver services?
It’s an important differentiation as some franchise opportunities prefer owners who are not the primary service provider because the owner can get bogged down in delivering a service instead of growing a business. Other franchise concepts are geared towards owner-operators, where the owners provide the service or products themselves.
If a franchise opportunity requires the owner to deliver a service or sell a product, you’ll need skills to deliver on those goals. That’s not to say a smoothie franchise isn’t for you just because you’ve never worked in the restaurant industry, however. In fact, in many cases the franchisor will provide all the tools and training you need to become successful.
7 – What are the ongoing franchise costs and fees?
You’ve done your research and you’re ready to take the next step in franchising and sign the agreement but one question still looms. Franchisors collect royalties on sales ranging from 3% to 6% or more. This is an important consideration once you’ve opened your doors.
Some franchisors charge an additional marketing fee to help promote a brand in the local market. This money might be used to pay for local or national print or digital ads, TV or radio spots or other marketing campaigns. advertisements in local or national publications, television ads.
Other costs might include licensing fees inventory, shelving and display racks you have to order from the franchise company, and lead generation charges. Understanding the structure of ongoing franchise costs is a vital piece of information you’ll need to ultimately make the best decision for the future of your business.
Consider becoming an Uptown Cheapskates resale clothing franchise owner today
Owning an Uptown Cheapskates resale clothing franchise might be the right opportunity for you. To inquire about how you can open an upscale resale clothing franchise in a booming industry, download our free Franchise Information Report today.